Two Thai businessmen have sued Tether over a $42.4 million USDT freeze, alleging the stablecoin issuer blacklisted their Ethereum wallets without court authorization. The lawsuit, filed in US District Court for the Southern District of New York, questions whether Tether acted improperly by freezing assets based on an informal government request.
Freeze Preceded Court Order
Plaintiffs Nutthawat Rukthammachalern and Natthawat Kasamvilas claim Tether blacklisted their addresses on October 30, 2025, following an informal request from a Homeland Security Investigations agent. According to the complaint, no warrant, court order, or advance notice accompanied the freeze of 42,417,785.62 USDT.
The underlying investigation stemmed from a North Carolina pig-butchering case—a romance and investment fraud scheme involving a fake trading platform. HSI Raleigh opened the case after receiving a victim tip describing how stolen funds were layered through multiple wallets to obscure their origin.
A court-issued seizure warrant did not arrive until February 19, 2026, more than three months after Tether's freeze. The warrant, issued by the Eastern District of North Carolina, directed Tether to burn the frozen USDT and reissue equivalent tokens to a government-controlled wallet.
Plaintiffs Challenge Tether's Authority
The lawsuit does not dispute the underlying criminal allegations but argues that Tether froze the tokens of secondary-market holders before receiving any judicial authorization. The complaint alleges that Tether continued earning Treasury yield on its reserves throughout the freeze while the plaintiffs had no access to their funds.
The filing includes claims for declaratory judgment against the freeze and burn, conversion, trespass to chattels, and unjust enrichment tied to reserve yield. Plaintiffs also seek an injunction to remove their wallets from Tether's blacklist.
Requested relief includes lifting the freeze and damages should the tokens be destroyed, along with punitive damages. The case raises questions about the authority of stablecoin issuers to freeze customer assets based on informal government requests without prior court orders.
