Tether Sued Over $42.4M USDT Freeze Before Court Warrant

Two Thai businessmen have sued Tether over the freezing of $42.4 million in USDT, claiming the stablecoin issuer blocked their funds months before U.S. authorities obtained a seizure warrant.

Nutthawat Rukthammachalern and Natthawat Kasamvilas filed the lawsuit on August 31 in the U.S. District Court for the Southern District of New York. The court docket lists Tether Holdings, Tether International, Tether Operations and Tether Investments as defendants.

According to the complaint, Tether blacklisted 10 Ethereum addresses holding about 42.4 million USDT on October 30, 2025. The plaintiffs allege the action followed an informal request from a Homeland Security Investigations agent and that no warrant, subpoena or court order had been issued at the time.

A federal seizure warrant was later issued in North Carolina on February 19, 2026, nearly four months after the wallets were frozen.

Five days later, the U.S. Department of Justice announced the seizure of more than $61 million in USDT linked to cryptocurrency investment scams. Prosecutors said investigators traced funds through multiple wallets and thanked Tether for helping transfer the assets.

The plaintiffs argue that the later warrant did not give Tether the right to freeze their USDT beforehand. They are seeking to have the blacklist removed and are also pursuing damages and other claims against the company.

Tether had not filed a public response to the lawsuit as of September 2. The allegations have not been ruled on by the court.