Tether says actions involving USDT have resulted in approximately $550 million being frozen during 2026 across wallets U.S. authorities linked to Iran’s Central Bank and other sanctioned Iranian networks. The disclosure came on September 28 as U.S. sanctions authorities expanded their scrutiny of digital-asset infrastructure connected to Iran. The $550 million figure represents assets restricted across multiple enforcement actions, not cryptocurrency seized directly by Tether for its own account.
The disclosure coincided with a report released by Democratic investigators for the U.S. Senate Permanent Subcommittee on Investigations. According to the official Senate findings, investigators analyzed 846 cryptocurrency wallets sanctioned or targeted for seizure over links to Iran and its regional proxies and found that 84% had transacted exclusively or nearly exclusively in USDT. That analysis describes USDT usage among a defined set of sanctioned or targeted wallets and should not be generalized to Iranian cryptocurrency activity as a whole.
Central Bank Wallets Account for Major Freezes
Tether says one of the largest interventions came in April, when it supported U.S. authorities in freezing more than $344 million in USDT across two addresses. The company said it acted after receiving information from OFAC and other U.S. law-enforcement agencies, with OFAC formally adding the addresses as digital-currency identifiers associated with the Central Bank of Iran the following day. The April action demonstrates the issuer-level control possible with centrally administered stablecoins: blacklisting can prevent tokens at specified addresses from being transferred even though the underlying blockchain continues operating.
A second major intervention followed in July, when more than $130 million across four wallets was frozen as U.S. authorities expanded measures involving Iranian financial networks. The action was separately reflected in earlier enforcement against more than $130 million in Iran-linked crypto wallets. The April and July cases account for roughly $474 million, meaning Tether’s nearly $550 million annual total also incorporates additional Iran-linked actions beyond those two headline freezes.
The Senate investigation presents a more critical view of Tether’s historical controls. Democratic PSI investigators argued that the company had not consistently frozen designated wallets before 2024 and that this contributed to widespread USDT use across the Iranian networks they examined. Tether, by contrast, points to its subsequent sanctions policy and cooperation with authorities as evidence that centralized stablecoins can help disrupt illicit finance. Those are competing assessments of Tether’s compliance record, while the underlying ability to blacklist specific USDT addresses is technically established.
Stablecoin Freeze Powers Face Wider Scrutiny
Tether says it now works with more than 340 law-enforcement agencies across 67 countries and coordinates directly with U.S. bodies including the DOJ, FBI, Secret Service, Homeland Security Investigations and OFAC. Issuer cooperation can make USDT materially different from bearer assets such as Bitcoin because Tether retains the technical ability to prevent blacklisted tokens from moving. That authority has also generated legal scrutiny in unrelated cases, including a recent lawsuit challenging Tether’s freeze of $42.4 million in USDT before a seizure warrant was issued.
The Iranian cases sit within a broader U.S. campaign targeting crypto infrastructure allegedly used for sanctions evasion. Treasury designated Iran’s largest digital-asset exchange, Nobitex, in June and in September sanctioned Iran-linked exchange BitBank and associated entities. Those measures show enforcement moving beyond individual wallet addresses toward exchanges, developers and financial networks alleged to facilitate sanctioned activity.
For stablecoin issuers, exchanges and custodians, the next concrete development will be the response to the PSI report and any investigations initiated by Treasury or the Justice Department. The operational issue is no longer whether centralized stablecoins can freeze designated funds, but how quickly issuers identify targeted wallets, what legal process supports those restrictions and how consistently sanctions controls are applied across interconnected platforms.
