Tether Freezes $344 Million in USDT as Treasury Links Wallets to Iran
The largest stablecoin issuer has become a front-line tool in Washington’s economic campaign against Iran. On Thursday, Tether froze more than $344 million worth of USDT held in two wallets on the Tron blockchain, acting at the request of U.S. authorities. On Friday, Treasury Secretary Scott Bessent said the Office of Foreign Assets Control was sanctioning Iran-linked wallets, and reports tied the frozen funds directly to that action.
The freeze is more than 1.5 times the size of Tether’s well-known 2023 action against scam networks, and it arrives as tensions over the Strait of Hormuz keep Iran’s finances in the spotlight.
What Tether did
Tether announced the freeze on Thursday without naming the blockchain or the target. It said its compliance team had worked with OFAC and other U.S. law enforcement agencies after receiving information tied to unlawful conduct. Blockchain security firm PeckShield identified the two addresses on Tron, one holding about $213 million and the other about $131 million, according to Decrypt.
Chief executive Paolo Ardoino said that USDT “is not a safe haven for illicit activity,” adding that the company acts immediately when credible links to sanctioned entities or criminal networks are found.
Tether used the announcement to highlight its broader compliance record. The company says it works with more than 340 law enforcement agencies in 65 countries, has supported more than 2,300 cases, and has frozen more than $4.4 billion in total, including $2.1 billion connected to U.S. authorities. Previous large actions include about $225 million frozen in late 2023 in connection with a human trafficking and “pig butchering” scam investigation, and roughly $182 million across five Tron wallets in January of this year.
The Iran connection
Tether’s statement did not mention Iran. That link came on Friday. CNN, citing an unnamed U.S. official, reported that the frozen USDT had been tied to Iranian sanctions, and Bessent then said in a statement that the government was sanctioning multiple Iran-linked wallets as part of President Trump’s effort to increase economic pressure on Tehran.
“We will follow the money that Tehran is desperately attempting to move outside of the country,” Bessent said, according to The Block, adding that the U.S. would target all financial lifelines tied to the regime. Cointelegraph reports that OFAC added the two Tron addresses, holding a combined $344 million, to its Specially Designated Nationals list, and quotes Bessent as saying the goal is to “systematically degrade Tehran’s ability to generate, move, and repatriate funds.”
Blockchain analytics firm Chainalysis told CNN that the two wallets had been regularly active years earlier. Chainalysis has separately estimated that Iran’s crypto holdings reached $7.8 billion in 2025, with the Islamic Revolutionary Guard Corps accounting for roughly half.
Crypto and the Strait of Hormuz
The freeze lands against a tense backdrop. The U.S. and Israel launched strikes on Iran in late February, and a ceasefire has been in place while disputes over shipping through the Strait of Hormuz continue. Earlier this month, the Financial Times reported that Iran was accepting bitcoin as payment for transit fees it charges tankers passing through the strait, and Forbes reported on Thursday that Iran had banked revenue from crypto tolls.
Iran has long used digital assets, including bitcoin mining and dollar stablecoins, to work around U.S. and allied sanctions. Friday’s action suggests Washington is now prepared to go after those channels directly, and that it can count on major issuers to help.
Why it matters for crypto readers
The case puts a spotlight on a feature of centralized stablecoins that many users rarely think about: the issuer can freeze tokens at the smart contract level. For law enforcement, that makes dollar stablecoins far easier to police than bitcoin. For users, it is a reminder that holding USDT or USDC means trusting the issuer’s compliance decisions.
It also sharpens a contrast that has been building through April. Circle, the issuer of USDC, faced heavy criticism after it did not freeze funds moving out of the $285 million Drift Protocol exploit on April 1. Circle has said it freezes tokens only when law enforcement identifies the funds or a court orders it, and Decrypt reports that a class action has since been filed against the company. Tether, by contrast, is presenting rapid cooperation with authorities as a selling point.
That positioning matters for Tether’s ambitions in the U.S. market, where the GENIUS Act now sets rules for stablecoin issuers and where regulators will weigh how well companies police their tokens. A high-profile freeze carried out alongside Treasury helps Tether make the case that a large offshore issuer can still be a reliable partner to American authorities.
There are open questions. Neither Tether nor Treasury has said how long the wallets were under investigation or exactly who controlled them. Whether the tokens are eventually seized or remain frozen indefinitely is also unclear.
What is clear is that stablecoins have become part of the geopolitical toolkit. As the U.S. tightens pressure on Iran’s finances, the companies that issue digital dollars are increasingly being asked to decide, in real time, which wallets can and cannot move money.