Tether Sued Over Alleged $42M USDT Freeze Before Warrant
Tether, the issuer of the popular stablecoin USDT, is facing a federal lawsuit after two Thai businessmen claimed that it froze $42.4 million in USDT nearly four months before authorities obtained a seizure warrant.
Nutthawat Rukthammachalern and Natthawat Kasamvilas filed the complaint on August 31 in the Southern District of New York, alleging that Tether blacklisted 10 Ethereum addresses holding 42,417,785.62 USDT on October 30, 2025.
The plaintiffs claim that they contacted Tether two days later and were directed to a Homeland Security Investigations agent without any legal basis for the freeze. A North Carolina magistrate judge issued a seizure warrant on February 19, 2026, directing Tether to burn the tokens and reissue them to a government wallet.
The plaintiffs are seeking restored access to their funds, damages, reserve yield disgorgement, and punitive damages. They argue that 'an informal request from a law enforcement agent is not legal process of any kind under federal law.'