Tether CEO Paolo Ardoino responded to a report by Democrats on the US Senate Permanent Subcommittee on Investigations, led by Senator Richard Blumenthal, which accused the company of being a financial lifeline for Iran's shadow banking network. Ardoino says that since 2023 Tether has frozen addresses on average four weeks before official designations by sanctions authorities. He also says Iran-linked stablecoin volumes fell by 94%. The report focused mainly on the period before 2024.
What it means: The clash shows the pressure on big stablecoin issuers to act as gatekeepers against illicit money. USDT is the world's most widely used stablecoin and is popular in countries with strict capital controls or high inflation, which also makes it attractive to those trying to evade sanctions. Tether can technically freeze addresses, and that ability is its main argument: removing bad actors pushes them to other channels. Critics reply that the company was slow to act in earlier years. The figures Ardoino cites come from the company itself and have not been independently verified. The case also has a political side, since the company has close ties to Washington and the Senate's make-up could change. In the EU, USDT is not MiCA-compliant and licensed providers have restricted it for European clients. Meanwhile the new EU anti-money laundering authority, AMLA, will strengthen supervision of crypto-asset providers. Sanctions compliance is becoming a central test for every issuer.
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