Thai Businessmen Sue Tether Over $42.4 Million USDT Freeze

Tether faces lawsuit over frozen stablecoin funds

Two Thai businessmen have filed a lawsuit against Tether, the company that issues USDT. USDT is a stablecoin, which is a type of cryptocurrency designed to keep its value equal to the U.S. dollar. The plaintiffs claim the company froze $42.4 million of their funds months before a legal warrant was issued.

Nutthawat Rukthammachalern and Natthawat Kasamvilas filed the complaint in a U.S. court on August 31. They allege that Tether blocked 10 of their Ethereum addresses, which are digital folders used to store and move cryptocurrency, on October 30, 2025. According to the lawsuit, a formal seizure warrant was not issued until February 19 of the following year.

Key details of the legal complaint

• The lawsuit involves $42.4 million in USDT across 10 different digital addresses.
• Plaintiffs allege Tether acted on an informal request from law enforcement.
• The businessmen claim they received the tokens through normal business transactions and have no direct relationship with Tether.
• The case was filed in the U.S. District Court for the Southern District of New York.

Thai businessmen claim tokens were blocked without a warrant

The plaintiffs argue that Tether froze their assets based only on an informal request from a U.S. law enforcement agent. They claim that because they were holding the tokens in private wallets and did not have a direct account with Tether, the company overstepped its authority by blocking the funds before a court order existed.

The lawsuit asks the court to force Tether to unfreeze the addresses. It also seeks to prevent Tether from destroying the frozen tokens or giving replacements to the government before a final court decision is made. Additionally, the businessmen are asking for damages and the interest Tether may have earned while holding the frozen funds.

Tether describes the lawsuit as baseless

Tether has responded to the allegations by stating the lawsuit is without merit. In an email, the company said the legal action is an attempt to interfere with its cooperation with global law enforcement agencies, including the U.S. Department of Justice (DOJ).

The company maintains that its actions are part of an effort to prevent the illegal use of its stablecoin. Tether often works with authorities to track and recover funds linked to criminal activity.

The connection to a wider fraud investigation

The frozen funds appear to be linked to a Department of Justice investigation into a type of fraud known as "pig-butchering" scams. In these scams, criminals build fake relationships with victims to trick them into sending money to fraudulent investment platforms.

U.S. prosecutors have stated that more than $61 million in USDT was stolen and laundered through these schemes. While the DOJ credited Tether for helping recover stolen assets, the ownership of the specific $42.4 million involved in this lawsuit has not yet been decided by a judge.

Why this case matters for crypto users

This lawsuit could clarify how much power stablecoin issuers have over tokens held in private wallets. It tests whether a company can freeze assets based on informal police requests or if they must wait for a formal court warrant. The outcome may also determine if token holders are entitled to interest earned on funds that are frozen but not yet officially forfeited to the government.

Source material

• CoinDesk