Thai Businessmen Sue Tether Over $42.4 Million USDT Freeze

Two Thai businessmen have sued Tether in the U.S. over approximately $42.4 million in frozen USDT, challenging the legal basis for the stablecoin issuer’s decision to restrict the funds and later transfer them to a government-controlled wallet.

According to information published by WuBlockchain, attorney Ariel Givner said the plaintiffs filed the lawsuit in the U.S. District Court for the Southern District of New York. They allege that Tether froze their wallets in October 2025 following an informal request from Homeland Security Investigations (HSI), without a warrant or court order at the time.

The dispute centers on whether Tether had sufficient legal authority to restrict the assets before judicial authorization was obtained.

Lawsuit Challenges Tether’s Authority to Freeze USDT

The plaintiffs do not dispute the underlying criminal allegations connected to the funds, according to the report. Instead, their lawsuit questions the process through which the USDT was initially frozen and subsequently moved.

A seizure warrant was issued by the Eastern District of North Carolina in February 2026. The warrant directed the burning and reissuance of the tokens to a government wallet, according to Givner’s account.

The funds are allegedly connected to a $61 financial million money-laundering case involving a so-called “pig butchering” scheme. The lawsuit nevertheless raises a separate legal question over whether Tether could act on an informal law-enforcement request before a court had issued an order authorizing the seizure.

It also challenges the scope of the February warrant, specifically whether the document authorized Tether to burn the affected USDT and reissue the equivalent tokens to a government-controlled wallet.

Tether Case Highlights Stablecoin Legal Risks

The case could have broader implications for the relationship between centralized stablecoin issuers and law-enforcement agencies. Tether’s ability to freeze USDT is an established feature of the centralized architecture surrounding the token, but disputes over the legal process used to exercise that authority can raise questions about asset control and due process.

For cryptocurrency users and institutional participants, the lawsuit puts renewed focus on the distinction between a token issuer’s operational powers and the judicial authority required to seize assets.

The next stage of the case will determine how the court addresses those questions, including whether Tether’s initial freeze and subsequent token transfer were legally authorized under the circumstances described by the plaintiffs.

Writer: Victoria Hale
Technology & Blockchain Writer

Victoria Hale writes about blockchain technology, digital infrastructure, and the intersection of emerging technologies with finance. Her articles explore how new protocols and systems are shaping the evolving digital economy.

She prioritises clarity and accuracy when explaining technical developments to a general audience.