The Weekly Grind (Oct 6–Oct 12): $86M Vanished and a $10B Tether Probe
Scandals shake the crypto world: $86M lost in wallet drains, Tether's $10B scrutiny.
Scandals shake the crypto world: $86M lost in wallet drains, Tether's $10B scrutiny.
Sen. Richard Blumenthal, the top Democrat on the Senate's Permanent Subcommittee on Investigations, sent Cantor chairman Brandon Lutnick a letter on October 8 demanding records on the firm's Tether ties. He alleges Cantor's 5% stake rose in estimated value from $600 million to $10 billion after Trump returned to office, and that Commerce Secretary Howard Lutnick received more than $250 million in that period. Cantor has until October 23 to respond.
A 28-page report from Senate Democrats led by Richard Blumenthal says USDT has become Iran's primary crypto payment rail, used by 84% of 846 sanctioned Iran-linked wallets and 87% of 757 wallets tied to terror financing. It says Tether took nine months to freeze 34 wallets Israel had designated, and wants Treasury and the DOJ to investigate. Tether says it froze about $550 million in Iran-linked USDT this year alone.
Operation Economic Fury has seized nearly $1 billion in Iran-linked crypto wallets. Treasury Secretary Bessent says some owners are 'typing in right now and not have realized their wallet had been grabbed.'
In 30 days, Tether silently blacklisted 371 wallets and froze $515 million in USDT across Tron and Ethereum — no court order required. That's 40% of everything they froze in all of 2025, done in a single month. Here's how the kill switch works, who's using it, and what it means for crypto.
Tether is bailing out Drift Protocol with $148M after North Korea's $285M heist — but the real play is quietly replacing Circle's USDC as Solana DeFi's settlement currency.