Tether Sued Over $42M in Frozen USDT After Informal Government Request

Thai businessmen Nutthawat Rukthammachalern and Natthawat Kasamvilas have filed a lawsuit against Tether in federal court over $42.4 million of frozen USDT.

The stablecoin issuer blacklisted ten Ethereum addresses on October 30, 2025, at the request of an informal Homeland Security agent.

A warrant was not issued until February 19, 2026, and it laid out a plan for Tether to burn the frozen tokens and mint new ones, but this may be too late as the lawsuit seeks damages for the time the funds were held.

Tether's reserves earn interest on US Treasury securities while the accounts are locked, which could create an incentive for the company to freeze tokens in the future.