Tether froze $550 million in Iran-linked USDT: can the issuer freeze your coins too?

What Tether froze

On September 28, Tether summed up its 2026 record on Iran: about $550 million in USDT has been frozen based on information from the US Treasury's Office of Foreign Assets Control (OFAC) and US law enforcement agencies. The funds are linked to the Central Bank of Iran and to sanctioned networks.

That's only part of the overall tally. By the company's own count, it has helped freeze more than $4.9 billion in total, over $2.4 billion of it at the request of US authorities. Tether works with more than 340 agencies in 67 countries and has been involved in more than 2,800 investigations. CEO Paolo Ardoino explains the logic this way: a public blockchain lets authorities trace where the money goes, and the company acts when it receives credible information from them.

What Senate investigators found

On the same day, September 28, Democratic Senate investigators released a report on how Tether complies with sanctions. They went through 846 wallets, and the report's headline example is about response time.

In June 2023, Israel's National Bureau for Counter Terror Financing (NBCTF) named 39 wallets. Tether blocked five of them immediately but didn't freeze the other 34 until March 2024. In between, more than $34.6 million in USDT flowed out of those wallets. Senator Richard Blumenthal passed the findings on to the US Treasury and the Justice Department. Tether's statement did not directly address the report's numbers.

How Tether freezes USDT

The USDT stablecoin is issued by a single company, and a blacklist is built into the token's smart contract. When Tether adds an address to it, the following applies:

• You can't send USDT from that address. The transaction fails right on the blockchain, and the wallet shows an error.
• Receiving still works. Incoming transfers go through, but the money can no longer get out.
• Other coins on the same address are left alone. The list lives inside the USDT contract, so TRX or ETH on a blacklisted address remains accessible.
• Tether can unfreeze an address, but rarely does. By the count of BlockSec analysts, about 3.6% of the addresses frozen in 2025 had been unfrozen by the end of that year, after 18 days on average.
• Burning is an option too. A frozen balance can be destroyed, and Tether usually mints the same amount of USDT right away to the victims' address or to an address named by a court.

According to BlockSec, as of July 26, 2026, the USDT blacklist contained 9,597 addresses: 6,901 on TRON and 2,696 on Ethereum. Circle, the issuer of USDC, has the same mechanism but uses it much less often: roughly 372 addresses and about $109 million in 2023–2025, usually on a court order.

Can Tether freeze your USDT?

Technically, it can freeze any address on any network where USDT is issued. In practice, freezes happen at the request of authorities in cases of sanctions, hacks, fraud and extortion. An ordinary user is unlikely to face a direct freeze, but there are three scenarios in which you can get burned through no fault of your own:

• "Dirty" USDT from a stranger. You were paid in coins that had passed through addresses belonging to scammers or sanctioned networks. Tether won't touch your address, but when you deposit, the exchange will check the coins' history and may block the deposit pending review.
• A shared address. A freeze applies to the entire address. If your money sits on a dubious service's address together with other people's funds, everything gets stuck, your share included. So when you need to exchange crypto online, it is safer to use a service that sends the coins straight to your own address instead of keeping them on a shared balance.
• P2P trades. A classic situation is selling crypto for USDT to a buyer who pays with stolen coins. Their address gets frozen, and you're the one who has to explain yourself to the exchange.

How to check if a USDT address is frozen

• Ethereum. Open the USDT contract in the Etherscan explorer, go to the Read Contract tab and use the isBlackListed function. Paste in the address: if the answer is true, the address is on the blacklist.
• TRON. The USDT contract on Tronscan has the same check in its read-contract section.
• Without a block explorer. Free freeze-checking services, such as the one from BlockSec, show an address's status on both networks at once.

Before a large deal with a stranger, check the address the money will come from as well. And if you need to find the transaction itself, our walkthrough on how to check a USDT transfer by its transaction hash will come in handy.

How to avoid depending on a single issuer

Freezes hurt most when everything is kept in one place. A few habits remove most of the risk:

• Keep your savings in your own wallet. Money on an exchange can be frozen by both the exchange and the issuer; on your own address, only by the issuer. For more, read our article on how a custodial crypto wallet differs from a non-custodial one.
• Don't keep everything in one stablecoin. You can swap part of your USDT for USDC on the Ethereum network, since Circle takes a different approach to freezes.
• Hold part of your reserve in coins with no issuer. Bitcoin has no company with a blacklist in a contract, and there's nobody who could freeze an address on the network itself. If you want that kind of reserve, you can exchange USDT to BTC without registration.
• Don't accept USDT from strangers without checking. A couple of minutes spent checking an address is cheaper than a dispute with an exchange.

VertEXchange has no accounts or internal balances: you enter your own wallet address, and the coins go straight to it.

Frequently asked questions

Can Tether freeze my wallet?

Tether can block USDT on any address, after which the tokens can't be sent from it. A freeze doesn't affect other coins on the same address. In practice, Tether does this at the request of authorities over sanctions, hacks and fraud.

How do I know if my USDT is frozen?

Transfers from the address will fail with an error. For a definitive answer, check the USDT contract: on Etherscan, that's the isBlackListed function, and on Tronscan the same check sits in the contract's read section.

Can frozen USDT be unfrozen?

Only Tether makes that call, and it rarely happens: according to BlockSec, about 3.6% of the addresses frozen in 2025 had been unfrozen by the end of the year.

Why did Tether freeze $550 million?

The funds are linked to the Central Bank of Iran and to networks under US sanctions. OFAC and US law enforcement identified the addresses, and Tether blocked the USDT held on them.

Does Circle freeze USDC?

Yes. The mechanism is the same, but Circle uses it far more sparingly: around 372 addresses and approximately $109 million in 2023–2025, typically on a court order.

Can bitcoin be frozen?

No, not on the Bitcoin network itself: it has no issuer and no contract with a blacklist. Only the platform where the coins are held can block them, which is why savings are safer in your own wallet.

What should I do if an exchange blocked my USDT deposit?

Contact the exchange's support team and gather evidence: where the coins came from, the trade details and your correspondence with the sender. If the coins came through a P2P trade, attach the trade number and receipts.