Two Thai entrepreneurs have initiated legal action against major stablecoin provider Tether concerning the freezing of 42.4 million USDT, claiming that the organization blocked these assets long before American officials secured a formal seizure warrant.
In an August 31 complaint filed within the U.S. District Court for the Southern District of New York, Nutthawat Rukthammachalern and Natthawat Kasamvilas stated that Tether locked 42.4 million USDT spread across 10 Ethereum wallet addresses on October 30, 2025.
The plaintiffs contend that Tether acted in response to an informal directive from an American law enforcement representative, noting that no warrant or alternative judicial authorization was granted until February 19, according to the legal filing.
The claimants explained that they obtained the USDT via secondary market commercial operations and maintained no direct corporate connection to Tether.
They are asking the court to mandate that Tether unblock the addresses from its blacklist, while also restraining the company from destroying the locked tokens or issuing replacement assets to a government-managed wallet prior to a definitive forfeiture judgment.
Tether dismissed the lawsuit as completely meritless.
“The new lawsuit against Tether 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,” Tether communicated to CoinDesk through email.
The legal action additionally pursues financial damages as well as the recovery of interest or alternative revenues that Tether accumulated from the reserves supporting the locked USDT. The specific allegations involve conversion, trespass to chattels, and unjust enrichment.
The litigation questions whether Tether possesses the authority to freeze assets held in private wallets prior to warrant issuance, and whether a subsequent warrant permits their destruction before a court determines they are subject to forfeiture.
The capital appears connected to a broader Department of Justice investigation involving more than $61 million in USDT, which prosecutors stated was stolen through cryptocurrency schemes known as pig-butchering scams—where fraudulent romantic or social connections are manipulated to siphon victims’ money before laundering it.
Officials indicated victims were routed to fraudulent investment platforms prior to their assets circulating through multiple wallets. The Department of Justice acknowledged Tether’s assistance in transferring the confiscated holdings, while the stablecoin creator characterized the intervention as an asset recovery executed with its cooperation.
Neither the ownership assertions made by the businessmen nor the assertions presented by the government regarding the contested USDT have been adjudicated by a court.
Originally published at https://www.coindesk.com/business/2026/09/02/tether-sued-over-usd42-4-million-usdt-freeze-allegedly-made-months-before-u-s-warrant.
