Tether Under Scrutiny
Tether is facing increased examination due to allegations connecting Iran’s Islamic Revolutionary Guard Corps (IRGC) with substantial cryptocurrency transactions involving Tether’s USDT stablecoin. Reports from the blockchain analysis firm TRM Labs indicate that entities associated with the IRGC have orchestrated nearly $1 billion in cryptocurrency movements this year, primarily utilizing USDT on the Tron network.
Transaction Analysis
Investigators assert that much of this activity flowed through two UK-registered exchanges—Zedcex and Zedxion—suggesting these platforms were chosen to circumvent international sanctions.
While the reported total concerns transaction volumes and not actual assets that have been frozen or seized, media coverage has misinterpreted this data, with headlines misleadingly suggesting that Tether has “frozen $1 billion“. This has led to misunderstandings within both the cryptocurrency market and policy-making circles.
Tether’s Response
In response, Tether maintains that it actively collaborates with law enforcement and adheres to sanction guidelines, emphasizing its capability to freeze USDT tokens at specific wallet addresses that fall under regulatory scrutiny. TRM Labs’ investigation traced the movements of funds related to the IRGC through tracking deposits and withdrawals associated with Zedcex and Zedxion.
Their analysis reveals that while IRGC-linked transactions amounted to about $24 million in 2023, they surged dramatically in 2024, estimating around $619 million, before tapering off to approximately $410 million in 2025.
Broader Implications
The overwhelming majority of these transfers were conducted in USDT, a nod to the stablecoin’s widespread use and liquidity among offshore trading centers. Reportedly, the Tron blockchain was favored for its low transaction fees and quick processing times. These findings have broader implications, highlighting how individuals and entities under sanctions manage to operate within cryptocurrency ecosystems despite the presence of international regulatory frameworks.
Enforcement Actions
On a related note, while Tether has acted to blacklist specific addresses associated with IRGC activities, documented enforcement actions have captured significantly smaller amounts. In September 2025, Israel’s National Bureau for Counter Terror Financing identified 187 wallet addresses with links to the IRGC, leading Tether to blacklist 39 addresses and freeze around $1.5 million in USDT associated with those wallets.
It’s crucial to note that the $1 billion figure encapsulates total transactions rather than actual frozen assets, indicating a disconnect between tracking illicit movements and effective asset seizure. This situation underscores the ongoing challenges regulators and stablecoin issuers face regarding the enforcement of sanctions within evolving global cryptocurrency markets.
