Tether's USDT Frozen Funds: $34M Slipped Past Senate Amid $550M Freeze

A Senate subcommittee released a preliminary report on September 28 that analyzed 846 crypto wallets associated with Iran and regional groups. The report found that 84% of these wallets transacted exclusively or nearly exclusively in USDT, Tether's dollar-pegged stablecoin.

The Democratic minority staff of the Senate Permanent Subcommittee on Investigations discovered that delays in blacklisting some identified wallets allowed tens of millions of dollars to move freely. Specifically, investigators calculated that more than $34.6 million in USDT moved out of 34 wallets associated with Tawfiq Muhammad Sa'id al-Law after an Israeli seizure notice was published but before the remaining addresses were frozen.

Tether responded to the report by stating that it helped freeze nearly $550 million in Iran-linked USDT during 2026. The company claimed that its actions involving USDT resulted in this significant amount being frozen across wallets identified as connected to Iran's central bank and Iranian sanctions networks.