Two Thai Businessmen Sue Tether Over $42.4M USDT Freeze as Issuer Calls Case ‘Baseless’
Tether is dealing with a lawsuit within the Southern District of New York over the freeze of $42.4 million in USDT belonging to 2 Thai businessmen, Nutthawat Rukthammachalern and Natthawat Kasamvilas.
The plaintiffs allege that Tether blacklisted their Ethereum addresses in late October 2025 after receiving a casual request from an agent with the US Department of Homeland Security (HSI). A complete of 42.4 million USDT was frozen. According to the businessmen, the stablecoin issuer took the motion with out a warrant, courtroom order, or discover to them.
Funds Linked to Pig-Butchering Investigation
According to an replace from Attorney Ariel Givner, the funds look like related to an HSI Raleigh investigation right into a pig-butchering case. The investigation began after a sufferer tip involving romance and funding fraud, a faux buying and selling platform, and the motion of stolen USDT by means of a number of wallets in an effort to make the funds seem clear.
One of the wallets linked to the plaintiffs held about $26.1 million and had already been recognized as a consolidation tackle in an “accumulate, layer, combine” circulate.
A warrant got here later. On February 19, 2026, the Eastern District of North Carolina issued warrant 5:26-MJ-1267-JG, directing Tether to burn the frozen USDT and remint the tokens to a authorities pockets. Five days later, EDNC and HSI announced a $61 million USDT seizure traced to addresses allegedly related to laundering proceeds stolen from pig-butchering victims. Tether was publicly thanked for finishing up the switch.
The lawsuit, nonetheless, doesn’t dispute the federal government’s declare that the funds are related to rip-off proceeds. Instead, the plaintiffs have challenged Tether’s authority to freeze, burn, and reissue USDT that they are saying was bought on the secondary market. The duo argued,
“Defendants are profiting instantly from the freeze itself. Defendants use the precise U.S. {dollars} they obtain after they mint USDT to buy interest-bearing monetary devices, predominantly United States Treasury securities custodied in New York.”
Their claims embrace declaratory judgment, conversion, trespass to chattels, unjust enrichment, and injunctive aid. The duo is in search of to raise the freeze, damages if the tokens are destroyed, reimbursement of reserve curiosity earned in the course of the freeze, and punitive damages.
Tether Defends Law Enforcement Role
The stablecoin issuer has defended the freeze. In a press release to CryptoPotato, the stablecoin issuer stated,
“The new lawsuit towards Tether is a baseless try and intrude with Tether’s vital work with world legislation enforcement, together with the Department of Justice, to stop the illegal use of USDT.”
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