Thai Investors Sue Tether Over $42M USDT Freeze Without Warrant

Two Thai businessmen have filed a lawsuit against stablecoin issuer Tether, alleging that the company froze $42.4 million worth of USDT on their Ethereum addresses without a court order.

Background of the Freeze

According to the complaint, Tether blacklisted ten Ethereum addresses holding a combined $42,417,785.62 in USDT on October 30, 2025. The plaintiffs claim they received no notice of the action until after the funds were locked.

Seizure Warrant Arrives Months Later

A magistrate judge in the Eastern District of North Carolina issued seizure warrant No. 5:26‑MJ‑1267‑JG on February 19, 2026. The warrant was linked to a separate investigation of a pig‑butchering investment‑scam scheme and arrived nearly four months after Tether’s freeze.

Legal Claims and Relief Sought

The suit, filed in the U.S. District Court for the Southern District of New York on August 31, 2026, seeks declaratory relief, an injunction, damages, and disgorgement of any income Tether earned on the reserves backing the frozen tokens. The plaintiffs also request that Tether be barred from burning or re‑issuing the disputed USDT while the case is pending and that their addresses be removed from the blacklist.

Tether’s History of Asset Freezes

Tether has previously coordinated with OFAC and U.S. law‑enforcement on large‑scale freezes, including a $344 million freeze in April 2025 and a May 2025 action that blacklisted 371 addresses and froze roughly $515 million in USDT over 30 days. The company’s ability to freeze funds is built into USDT’s smart contract via a centralized administrative key, a feature now being challenged in this lawsuit.

Key Issues Moving Forward

The central factual dispute will likely focus on whether the ten addresses were individually linked to the alleged fraud or were swept up in a broader drag‑net. The outcome could have implications for how stablecoin issuers enforce compliance freezes.