Lawsuit challenges Tether for allegedly freezing $42.4 million USDT before U.S. warrant
Two individuals have filed a lawsuit against Tether, alleging the company froze $42.4 million in USDT without a valid legal warrant. The plaintiffs claim the freeze was based on an informal request from law enforcement and are seeking the release of their funds.
Why it matters
This case highlights the legal and ethical tensions between stablecoin issuers' compliance with law enforcement and the property rights of digital asset holders.
Nutthawat Rukthammachalern and Natthawat Kasamvilas said in an Aug. 31 complaint filed in the U.S. District Court for the Southern District of New York that Tether froze 42.4 million USDT across 10 Ethereum addresses on Oct. 30, 2025.
They allege Tether acted on an informal request from a U.S. law enforcement agent, with no warrant or other legal process issued until Feb. 19, according to the complaint.
CoinDesk has reached out to Tether for comment but hasn’t heard back at the time of writing.
The plaintiffs said they acquired the USDT through secondary-market business transactions and had no direct relationship with Tether.
They want the court to order Tether to remove the addresses from its blacklist and prevent it from destroying the frozen tokens and issuing replacements to a government-controlled wallet before a final forfeiture ruling.
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