Tether sued over $42.4 million USDT freeze months before seizure warrant
Two Thai businessmen have filed a lawsuit against Tether, the company behind the USDT stablecoin, a type of cryptocurrency designed to hold a steady value, in a Manhattan federal court. They claim Tether froze $42.4 million of their USDT across 10 Ethereum addresses three months before a U.S. seizure warrant was issued.
Freeze happened in October 2025, warrant came in February 2026
Court documents show the funds were frozen on October 30, 2025, in a single batch operation lasting two and a half minutes. The seizure warrant cited in the complaint is dated February 19, 2026. The plaintiffs, Nutthawat Rukthammachalern and Natthawat Kasamvilas, argue they bought the USDT on the secondary market and had no direct contract with Tether.
Tether’s terms allow it to freeze tokens when required by law or at its own discretion. The company has previously stated it cooperates with law enforcement to prevent illegal use of USDT.
Key details from the lawsuit
- 10 Ethereum addresses were frozen, holding a combined total of 42,417,785.62 USDT.
- The largest single address, linked to Kasamvilas, contained 26.1 million USDT.
- Tether’s system blocks outbound transfers from frozen addresses but still allows them to receive funds.
- The plaintiffs filed a motion in July 2026 seeking the return of their property, but no decision has been made.
Tether’s response and broader context
Tether called the lawsuit a “baseless attempt to interfere” with its work with global law enforcement. The company has reported freezing over $4.4 billion in assets across 2,300 cases in coordination with authorities.
The plaintiffs allege Tether acted on an informal request from a U.S. government agent before the warrant was issued. They also claim Tether did not disclose its role in freezing the funds when contacting one of the plaintiffs in November 2025.
What is still unclear
It remains unconfirmed whether Tether froze the funds based on an informal request or another reason. The government has not yet responded to the plaintiffs’ motion for the return of their property, and no civil forfeiture complaint has been filed against the addresses in question.
Why this matters
The case raises questions about the process and timing of asset freezes by stablecoin issuers like Tether, which hold significant power over user funds. It also highlights the legal gray areas when companies take action before formal court orders are in place.
