$42.4M Tether Freeze Sparks Lawsuit Over Issuer's Authority
Thai businessmen Nutthawat Rukthammachalern and Natthawat Kasamvilas have filed a lawsuit against Tether in the U.S. District Court for the Southern District of New York, alleging that the issuer improperly froze approximately $42.4 million worth of USDT on October 30, 2025.
The plaintiffs claim that Tether acted after receiving an informal request from a Homeland Security Investigations agent and used its Ethereum smart contract to prevent tokens at designated addresses from moving.
The businessmen argue that possessing technical control over the smart contract does not automatically give Tether legal authority over tokens held by third parties. They also dispute whether a seizure warrant can retroactively validate Tether's initial action and claim that burning the named property and replacing it with newly minted tokens before a final forfeiture judgment is unlawful.
The lawsuit focuses on whether a private stablecoin issuer may restrict secondary-market tokens after an informal law-enforcement request and before receiving judicial authorization. The businessmen seek to prevent Tether from burning those tokens, remove the blacklist, pay damages if the tokens are destroyed, and surrender income allegedly earned from reserves supporting the frozen USDT.