Tether Sued Over $42M USDT Freeze Before Court Warrant
Tether, the issuer of USDT stablecoins, is facing a lawsuit in the US District Court for the Southern District of New York. The plaintiffs claim that Tether froze $42.4 million worth of USDT in October 2025 without a court warrant, based on an informal request from US Homeland Security Investigations.
The funds were allegedly linked to a pig-butchering investment scam involving over $61 million. A later court warrant issued by the US District Court for the Eastern District of North Carolina confirmed that the funds should be seized and burned, with the tokens being reissued to a government wallet.
The key issue in this case is whether Tether had the authority to freeze user assets based solely on a request from investigators. The plaintiffs do not dispute that the funds were tied to the fraud case but argue that Tether's actions were unlawful.