Tether Sued Over $42.4M Frozen USDT Tokens Amid Regulatory Pressure

Tether has been hit with a lawsuit over its freezing of $42.4 million in USDT tokens, with plaintiffs claiming the stablecoin issuer profited from the frozen funds.

The lawsuit was filed on August 31st at the Southern District of New York (SDNY) by two Thai nationals, Nutthawat Rukthammachalern and Natthawat Kasamvilas.

The plaintiffs claim Tether does not clearly disclose its power to freeze USDT tokens and has earned interest on the frozen funds. They argue that Tether froze their funds without a warrant or court order, citing an informal request by U.S. Homeland Security Investigations (HSI) as the reason for the seizure.

The victims are seeking a declaration from the court that Tether's seizure had no legal basis and want their frozen funds, plus all earned interest income, returned to them.