Tether Scrutiny Grows After Reports Link IRGC to $1B in USDT Flows

Tether has come under renewed scrutiny after reports linked Iran’s Islamic Revolutionary Guard Corps to large-scale crypto movements using USDT, raising questions about enforcement versus exposure.

Investigative reporting citing blockchain analytics firm TRM Labs said IRGC-linked entities moved close to $1 billion in cryptocurrency since early 2023, largely through USDT on the Tron network. The activity reportedly ran through two UK-registered exchanges, Zedcex and Zedxion, which investigators say were used to bypass international sanctions.

The reported figure refers to transaction volume, not assets seized or frozen. However, headlines and social media posts quickly framed the finding as “Tether freezing $1 billion,” prompting confusion across crypto markets and policy circles.

Tether has repeatedly said it cooperates with law enforcement and complies with sanctions requests. The company maintains the ability to freeze USDT at the address level when wallets are formally sanctioned or flagged by authorities.

What Investigators Found in the IRGC-linked Flows

TRM Labs said it identified IRGC-linked activity by tracking deposits, withdrawals, and wallet infrastructure tied to the two exchanges. According to the analysis, IRGC-associated crypto flows totaled about $24 million in 2023, surged to roughly $619 million in 2024, and reached around $410 million in 2025.

Most of the funds moved in USDT, reflecting the stablecoin’s liquidity and acceptance across offshore trading venues. Investigators said Tron’s low transaction fees and fast settlement made it the preferred network for these transfers.

The findings were shared with journalists and cited as part of broader reporting on how sanctioned actors continue to access crypto rails despite global compliance frameworks.

What Tether Actually Froze

Separately, documented enforcement actions show far smaller amounts were frozen. In September 2025, Israel’s National Bureau for Counter Terror Financing published a list of 187 wallet addresses it linked to IRGC activity.

Following that designation, Tether blacklisted 39 of those addresses, freezing about $1.5 million in USDT held in those wallets at the time, according to blockchain intelligence firm Elliptic.

That distinction matters. The $1 billion figure reflects cumulative crypto movement, while the freeze involved only balances present in sanctioned wallets when action occurred. Tether has not confirmed freezing anything close to $1 billion in a single enforcement move.

The episode highlights the gap between tracking illicit crypto flows and actually seizing assets, as regulators and stablecoin issuers continue to face pressure over sanctions enforcement in global crypto markets.