Tether faces lawsuit over $42.4M USDT freeze

Two Thai businessmen sued Tether in New York, alleging it froze $42.4M in USDT from their wallets without a court order. The lawsuit questions Tether's authority and seeks damages.

Two Thai businessmen, Nutthawat Rukthammachalern and Natthawat Kasamvilas, have filed a lawsuit against Tether in the U.S. District Court for the Southern District of New York. They allege that Tether froze approximately $42.4 million in USDT from their Ethereum wallets without a court order. The freeze reportedly took place on October 30, 2025, after Tether received an informal request from a Homeland Security Investigations agent, without a warrant or formal legal process. The plaintiffs claim they were not notified before the freeze and that Tether later directed them to the HSI agent when they sought information about their locked funds. In February 2026, a seizure warrant was issued, instructing Tether to destroy the frozen USDT and mint new tokens for a government-controlled address. The lawsuit seeks damages, an injunction, and the return of profits Tether earned from the reserves backing the frozen tokens. This case highlights concerns about stablecoin issuers' authority to freeze assets without formal legal procedures and the balance between regulatory compliance and user rights.