Tether Accused of Illegally Freezing $42.4M Worth of USDT

Two Thai businessmen have filed a lawsuit against Tether in the US over the freezing of $42.4 million worth of USDT. The case was lodged in the US District Court for the Southern District of New York on August 31, 2026.

The freeze occurred between October 30, 2025, and February 19, 2026, after Tether received an informal request from a US government agent. Over three months later, the US government secured a seizure warrant instructing Tether to destroy the frozen USDT and reissue the same amount to a government-controlled wallet.

The plaintiffs claim that getting an informal request from law enforcement does not automatically give a private company the legal power to interfere with someone else's property. They argue that Tether profited from the freeze by investing the reserves linked to the frozen USDT in interest-bearing securities, mainly US Treasuries.