Two Thai businessmen, Nutthawat Rukthammachalern and Natthawat Kasamvilas, have filed a lawsuit in the Southern District of New York against Tether over the freeze of $42.4 million in USDT. The plaintiffs allege that Tether blacklisted their Ethereum addresses in late October 2025 after receiving an informal request from a US Department of Homeland Security (HSI) agent, without providing them notice, a warrant, or court order.
According to court filings, the frozen funds are connected to an HSI Raleigh investigation into a pig-butchering scheme involving romance and investment fraud. One wallet linked to the plaintiffs held approximately $26.1 million and had been identified as a consolidation address in the suspected money-laundering flow.
On February 19, 2026, the Eastern District of North Carolina issued a warrant directing Tether to burn the frozen USDT and remint the tokens to a government wallet. Five days later, the EDNC and HSI announced a $61 million USDT seizure traced to addresses allegedly associated with laundering proceeds from pig-butchering victims. Tether was publicly thanked for executing the transfer.
Rather than disputing the government's claim that the funds are connected to scam proceeds, the plaintiffs have challenged Tether's authority to freeze, burn, and reissue USDT purchased on the secondary market. Their lawsuit seeks declaratory judgment, conversion damages, trespass to chattels, unjust enrichment, and injunctive relief, including lifting the freeze, damages if tokens are destroyed, repayment of reserve interest earned during the freeze, and punitive damages.
Tether has defended its actions. In a statement, the stablecoin issuer said the lawsuit is a baseless attempt to interfere with Tether's important work with global law enforcement, including the Department of Justice, to prevent the unlawful use of USDT.
