Tether Sued Over $42M USDT Freeze Without Warrant in New York Court
Thai businessmen Nutthawat Rukthammachalern and Natthawat Kasamvilas have filed a lawsuit against Tether, alleging the stablecoin issuer blacklisted their Ethereum addresses without a warrant. On October 30, 2025, Tether froze $42.4 million in USDT at the informal request of a Homeland Security Investigations (HSI) agent.
The freeze occurred nearly four months before a federal magistrate judge issued a seizure warrant on February 19, 2026. The plaintiffs do not dispute that the government claims the funds are connected to alleged pig-butchering fraud, but they argue Tether had no legal basis to freeze assets held by secondary-market buyers who never opened an account with the company.
The plaintiffs seek disgorgement of reserve yield earned on frozen tokens, which Tether holds through Cantor Fitzgerald. The company earns approximately $130 billion in Treasury securities and continues collecting coupon income while holders cannot redeem their assets.
Tether has defended its actions, stating that it works with more than 340 law enforcement agencies across 65 countries to prevent unlawful activity. The company's CEO Paolo Ardoino said USDT is not a safe haven for illicit activity, and when credible links are identified, they act immediately.