The Context
On 3 January 2026, the arrest of Venezuelan President Nicolás Maduro triggered renewed forensic examination of Tether’s (USDT) financial flows. The audit trail is clear. Since 2020, Venezuela’s state oil company (PDVSA) has used USDT to bypass sanctions. By December 2025, an estimated 80% of the country’s oil revenue flowed through the stablecoin. In 2024, Tether itself froze 41 Venezuelan wallets linked to this trade, proving institutional knowledge of the sanctions evasion scheme. The platform continued processing the bulk of this revenue thereafter. Secondary infrastructure, like JPMorgan Chase’s banking services for the Venezuelan crypto firm Kontigo, creates a wider liability web.
The Risk
The risk is quantified and material. Facilitating sanctions evasion creates a direct financial exposure. For a New Zealand director, this may indicate a catastrophic failure of duty under the Companies Act 1993. Section 131 mandates that a director must act in good faith and in the best interests of the company. Knowingly enabling, or being wilfully blind to, transactions that breach international sanctions is a breach of that duty. The liability is personal. Fines under the Act are one vector. More severe are potential actions from foreign regulators, which could include asset freezes, crippling penalties, and extradition proceedings. The governance gap is the failure to trace the dollar value of complicit transactions and sever the audit trail.
The Control
The strategic solution is a forensic transaction audit with a singular focus: mapping all USDT inflows and outflows to and from jurisdictions under comprehensive sanctions. This is not standard AML screening. It requires tracing the ultimate beneficial ownership of wallet clusters and quantifying the exact volume and value of transactions linked to state-owned enterprises in sanctioned nations. The audit must be independent, and its findings must trigger an immediate, public cessation of services to those clusters, with full disclosure to relevant authorities.
The Challenge
These are the critical questions you should be raising at the board table:
| What is the precise dollar value of transactions our platform has processed in the last 24 months that can be forensically linked to state-owned entities in comprehensively sanctioned jurisdictions like Venezuela, Iran, or North Korea? | |
| Given Tether’s documented 2024 wallet freezes, what is our protocol for identifying and blocking wallets that are second or third-degree hops from known sanctions evasion clusters, and where is the governance failure that allowed this activity to continue? | |
| If a regulator presented our transaction ledger as evidence tomorrow, which specific entries would form the basis for a claim of reckless trading under the Companies Act 1993, and what is our quantified liability reserve for that scenario? |