Tether Freeze Defended by Ripple Exec Amid Stablecoin Control Questions
Ripple's Chief Technology Officer David Schwartz has defended Tether's decision to freeze $42.4 million in USDT after receiving an informal request from Homeland Security Investigations, arguing that the company had little practical choice but to secure the assets while competing ownership claims were unresolved.
The case centers around two Thai businessmen who filed a lawsuit against Tether in the Southern District of New York on August 31, alleging that the company blacklisted 10 Ethereum addresses containing USDT after an informal request from authorities. A formal seizure warrant was issued months later, on February 19, 2026.
Schwartz's defense of Tether is particularly interesting given Ripple's own operation of a competing regulated stablecoin, RLUSD. Ripple's terms explicitly reserve broad powers to freeze digital addresses, allowing the company to blacklist wallets holding RLUSD when required by law or under Ripple's internal compliance policies, including in response to law-enforcement requests.
The key distinction between USDT and XRP lies in their nature as issuer-backed stablecoins versus XRP's role as a native asset. XRPL documentation makes clear that freeze and clawback functionality applies to issued tokens, not XRP. Schwartz has emphasized this point before, noting that Ripple cannot blacklist an XRP holder or reverse a valid XRP transaction once the network has finalized it.