Tether Faces Scrutiny Over USDT Transactions Amid Senate Investigation
Tether's handling of USDT transactions has come under scrutiny from Senate investigators who claim that delays in blacklisting some identified wallets allowed tens of millions of dollars to keep moving. The Democratic minority staff of the Senate Permanent Subcommittee on Investigations analyzed 846 crypto wallets that US or Israeli authorities had sanctioned or targeted for seizure over their associations with Iran and regional groups.
The report found that 84% of these wallets transacted exclusively or nearly exclusively in USDT, a stablecoin designed to track the US dollar. Tether claims it helped freeze nearly $550 million in Iran-linked USDT during 2026, but Senate investigators say that delays in blacklisting some addresses allowed more than $34.6 million in USDT to move out of those wallets before they were frozen.
Tether's CEO Paolo Ardoino said the company acts when authorities provide credible information and argued that public blockchains give investigators visibility into fund movements that cash does not. However, the Senate report highlights a potential issue with Tether's anti-money laundering and sanctions compliance.
The findings by the Democratic minority are not a court determination that Tether violated US law. They concern an earlier period than the enforcement actions Tether highlighted from 2026.