Tether Sued Over Alleged Illicit Freeze of $42 Million in Crypto

Two Thai businessmen have filed a lawsuit against Tether in a New York district court. They claim that the stablecoin issuer illegally froze $42.4 million in USDT in October 2025, as part of an investigation into a pig butchering scheme.

The plaintiffs acknowledged their involvement in the scam but dispute the legality of Tether's actions in freezing their funds without a warrant. Authorities later issued a seizure warrant for the funds in February 2026, directing that they be burned and reissued to a government wallet.

This case tests the authority of stablecoin issuers to freeze user funds without proper legal process. The outcome may have significant implications for the cryptocurrency industry and the regulation of stablecoins.