Thai Businessmen Sue Tether Over $42M USDT Freeze in Pig Butchering Case

Thai Businessmen Sue Tether Over $42M Freeze

Two Thai businessmen have filed a lawsuit against Tether, the company behind the stablecoin USDT, in a New York district court. They claim Tether illegally froze $42.4 million in USDT in October 2025. USDT is a type of cryptocurrency designed to hold a steady value.

The freeze was part of a case related to a pig butchering scam, a type of fraud where criminals build trust with victims before stealing their money. The plaintiffs do not dispute their involvement in the investment scam, but they argue Tether acted without a warrant.

According to the lawsuit, the freeze followed an informal request from US Homeland Security Investigations. A seizure warrant was only issued later, in February 2026, by authorities in the Eastern District of North Carolina. That warrant ordered the tokens to be burned and reissued to a government wallet. The case tests how much power stablecoin issuers have to freeze funds.

Key Numbers and Details

• The frozen amount is $42.4 million in USDT.
• The funds were frozen in October 2025.
• The seizure warrant came in February 2026.
• The plaintiffs admit involvement in the scam but challenge Tether's freezing authority.

Other Asian Crypto Updates

In other news from Asia, Thailand has adopted a crypto Travel Rule. Starting February 27, 2027, digital asset operators in Thailand must collect information about parties involved in crypto transfers, including those using self-custodial wallets. Self-custodial wallets are wallets where users control their own funds.

Pencil Finance completed a $1 million onchain student loan cycle, serving 6,600 students across 118 schools in Southeast Asia. About 1,050 students received direct funding. Pencil Finance claims this is the first fully onchain lending cycle, meaning the loans are recorded on a blockchain network.

Australia's securities regulator, ASIC, has warned unlicensed crypto firms to apply for a financial services license by September 30 or face penalties, including fines of up to 10% of annual turnover.

Standard Chartered has launched spot Bitcoin and Ether trading for institutional clients in the UAE. The bank says it is the first global bank to offer such trading in the region.

What is Confirmed

Confirmed details include the lawsuit against Tether, the freeze amount and dates, the new Thai regulations, the Pencil Finance loan cycle, the Australian licensing deadline, and Standard Chartered's launch in the UAE.

What is Still Unclear

It remains unclear whether the court will side with the plaintiffs or Tether on the freezing authority issue. The outcome of the Thai consultation on overseas derivatives is also pending.

Why It Matters

The Tether lawsuit could set a precedent for how stablecoin issuers handle freezing requests. The Thai Travel Rule and Australian licensing requirements show a global trend toward stricter crypto regulation.

What Happens Next

The Thai SEC's consultation on retail access to overseas derivatives remains open until September 30. Australian firms have until September 30 to apply for licenses.

Sources

• Cointelegraph