Israel seizes Iran-linked wallets with up to $1.5B USDT

Israel’s Ministry of Defense ordered the seizure of 137 crypto wallets, with an estimated balance of $1.5B USDT, based on additional reports. The wallets have been linked to sanctioned usage in Iran. 

A total of 137 wallets with up to $1.5B were seized by the Israel Ministry of Defense. The wallets mostly contained USDT, and were reportedly linked to sanctioned usage in Iran. The official order listed the Ethereum addresses for the assets.

The wallets were identified as property of the designated terrorist organization Iran’s Revolutionary Guards and were considered linked to potential terrorist financing. The wallets listed used a TRON address format, as TRON-based USDT has been associated with illegal financing.

The wallets reportedly held up to $1.5B in total balances, but the remaining amount is at $1.5M. The discovery of the long list of addresses follows previous connections of terrorism to using TRON-based wallets for donations. 

Iran’s crypto usage is focused on TRON, a chain that does not face much scrutiny as Ethereum. However, the recent hack of the Nobitex exchange happened through TRON-based transfers, and was reportedly a deliberate attempt to deprive Iranian organizations of crypto financing. Researchers from Eliptic have linked Nobitex to IRGC financing, mostly due to connections to vanity addresses.

Will the USDT confiscation have an impact? 

Crypto wallets remain anonymous or at least pseudonymous. Seizing wallets is also impossible without access to private keys. USDT can be frozen, but there are no reports of involving Tether or TRON in their role of controlling the illegal usage of stablecoins. 

In general, USDT illegal usage has been handled by the T3 Financial Crime Unit, where TRON and Tether collaborate and freeze some known wallets linked to scams. However, the crime unit has frozen a limited amount of wallets. A total of 2,459 addresses have been banned to date. Based on Eliptic data, Tether blacklisted a total of 39 addresses from the list.

The recently seized wallets were active in early 2025, when most of the fund transfers happened, leaving a small residual balance. 

Despite the risk of freezing stablecoins, usage is still near peak levels. On-chain transactions remain permissionless, and the danger of having assets frozen does not prevent most regular users from interacting with USDT. 

USDT freezes are still rare

The T3 financial crime unit has frozen and recovered up to $100M USDT to date, mostly linked to personal scams, as Cryptopolitan reported. Banned and blacklisted wallets hold a total of $1.5B on Ethereum.  

The T3 unit freezes wallets on an ad-hoc basis, after specific collaboration with exchanges. It remains unknown if the blacklisted wallets will be watched, or if there would be efforts to freeze and burn their assets. 

The interactions with the terrorism-linked wallets are also still verified. Some of the wallets may belong to contracts or services, which only interacted with the IRGC addresses.

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