US uses Tether to freeze $475M in Iran-linked USDT holdings
In brief
- US Treasury froze $475 million in USDT linked to Iran within three months using Tether's control mechanisms.
- July 14: Treasury sanctioned four Tron wallets holding $131 million in Iran-connected USDT.
- April: Tether froze $344 million across two wallets in coordination with OFAC and law enforcement.
- Stablecoins differ from Bitcoin—issuers can freeze assets, but no authority can stop Bitcoin transfers.
- Enforcement is part of Operation Economic Fury, targeting crypto exchanges, intermediaries, and blockchain addresses.
Tether's Freezing Power
On July 14, the US government sanctioned four wallets on the Tron blockchain holding approximately $131 million in USDT linked to the Central Bank of Iran. The action followed Tether's April freeze of more than $344 million across two other Tron wallets in coordination with OFAC and US law enforcement.
Tether can enforce these restrictions because it controls the contracts governing USDT. The company can block an address and prevent tokens held there from being moved, even though the wallet and its balance remain visible on the public blockchain. This technical capability sets stablecoins apart from decentralized cryptocurrencies like Bitcoin, where no central authority can unilaterally disable transfers.
Operation Economic Fury
The Treasury Department is executing an enforcement initiative known as Operation Economic Fury. Under this program, the department has targeted crypto exchanges, intermediaries, and blockchain addresses suspected of moving Iranian funds.
In June, OFAC sanctioned four Iranian crypto exchanges: Nobitex, Bitpin, Ramzinex, and Wallex. Treasury said Nobitex processed more than half of Iran's crypto inflows in 2025 and helped the Central Bank of Iran acquire hundreds of millions of dollars in stablecoins.
The Broader Picture
By late May, Treasury Secretary Bessent said US authorities had seized or frozen nearly $1 billion in cryptocurrency connected to Iran. This represents a fraction of Iran's total crypto activity. Chainalysis estimated that Iran's cryptocurrency ecosystem received more than $7.78 billion in 2025.
Addresses linked to the Islamic Revolutionary Guard Corps accounted for about half of Iran's crypto activity in the fourth quarter and received more than $3 billion over the year. The scale of Iran's crypto operations underscores why Washington is now targeting both entry points and exit ramps. By identifying platforms that convert local currency into digital assets and working with issuers like Tether to disable tokens, authorities can now intercept funds at multiple layers of the ecosystem.
Frequently asked questions
How can Tether freeze stablecoin holdings if they're on the blockchain?
Tether controls the smart contracts governing USDT. It can block specific addresses and prevent tokens from being moved, even though the wallet and balance remain visible on the blockchain. This centralized control distinguishes stablecoins from decentralized cryptocurrencies like Bitcoin.
What is Operation Economic Fury?
It's a US Treasury enforcement initiative targeting crypto exchanges, intermediaries, and blockchain addresses suspected of facilitating Iranian sanctions evasion. The program has sanctioned Iranian exchanges and frozen stablecoin holdings connected to Iran's Central Bank.
How much cryptocurrency has the US seized or frozen from Iran?
By late May, US authorities had seized or frozen nearly $1 billion in cryptocurrency connected to Iran. This includes approximately $475 million in USDT frozen in less than three months, though Iran's total crypto ecosystem received over $7.78 billion in 2025.
