Tether freezes $550M in Iran-linked USDT

Tether froze about $550 million in USDT linked to Iranian accounts after receiving a request from a U.S. agency, the company confirmed. The firm did not provide timing or the specific wallets involved.

Tether CEO Paolo Ardoino wrote, “Public blockchains provide visibility for investigators where cash does not,” and said the company will assist law enforcement when given credible information to act.

Reported transaction volume for USDT reached $4.4 trillion in the fourth quarter of 2025. Regulators and market participants have raised monitoring and control concerns as volumes have grown.

A U.S. Senate report found that 84% of 846 wallets targeted for sanctions or seizure used USDT as their main currency. The report traced more than $600 million in USDT tied to two sanctioned Iranian oil smugglers between 2021 and 2025 and mapped flows linking Iranian banks to financial networks associated with Hizballah and the Houthis.

Developers have expanded USDT capacity on a blockchain called StableChain. The network offers about 0.7-second finality and reserved block space, and an update set a target capacity of up to 10,000 transactions per second to increase throughput and reduce congestion.

Faster settlement and higher transaction volumes reduce the time available for transaction monitoring systems to detect suspicious movements before funds move again, industry participants say. On-chain networks do not perform sanctions screening by themselves, so issuer-level controls remain a point of intervention.

Tether maintains mechanisms to freeze tokens tied to addresses when it receives validated enforcement requests and says it will act on credible law enforcement information. Company statements and observers say the speed and consistency of such freezes will depend on coordination among issuers, crypto intermediaries and enforcement agencies and on updates to monitoring tools and sanctions data.