Tether Sued Over Alleged Unlawful Freeze of $42.4 Million in USDT

In brief

• Two Thai businessmen sued Tether in New York federal court on Monday.
• They claim the company froze roughly $42.4 million worth of USDT at a federal agent’s informal request.
• The plaintiffs want access restored and are seeking damages and income allegedly earned from the reserves backing the tokens.

Two Thai businessmen sued Tether on Monday, claiming the stablecoin issuer froze roughly $42.4 million worth of USDT without legal authority.

Nutthawat Rukthammachalern and Natthawat Kasamvilas filed the complaint in the U.S. District Court for the Southern District of New York. It names four Tether entities and concerns USDT held across ten Ethereum addresses.

According to the complaint, Tether blacklisted the addresses last October at the informal request of a Homeland Security Investigations agent, without a warrant or court order. More than three months later, a federal magistrate judge in North Carolina issued a seizure warrant outlining a plan for Tether to burn the restricted tokens, mint replacement USDT, and transfer it to a government-controlled wallet.

The plaintiffs argue that the warrant neither retroactively authorized the freeze nor permitted Tether to destroy the original tokens before a final forfeiture judgment.