Tether Sued for $42 Million Over Unauthorized USDT Freeze

Tether, the stablecoin issuer behind USDT, is facing a $42 million lawsuit over its decision to freeze 42.4 million tokens without a warrant. According to a complaint filed by two Thai businessmen, Nuttawat Rukhamchaloen and Nattawat Kasamwilas, Tether blacklisted their Ethereum addresses on October 30, 2025, following an informal request from U.S. law enforcement.

The plaintiffs allege that the corresponding seizure warrant was not issued until February 19, 2026, and are seeking to have the associated addresses removed from Tether's blacklist. They also want to prevent Tether from destroying the frozen tokens or issuing replacement USDT to a government-controlled wallet before a final forfeiture ruling is issued.

The case raises questions about the limits of a centralized stablecoin issuer's authority when cooperating with law enforcement. The disputed funds appear to be connected to a broader U.S. Department of Justice investigation involving more than $61 million in USDT, which was allegedly stolen through pig-butchering scams.