Two Thai businessmen sued Tether for allegedly freezing $42.4M USDT without court authorization, challenging stablecoin issuer powers over asset seizure and reissuance.
DeFi & Yields ·
Two Thai businessmen have initiated legal action against Tether in New York federal court challenging the stablecoin issuer's authority to immobilize assets without judicial approval. The complaint, filed through attorney Ariel Givner, centers on approximately $42.4 million in USDT that Tether restricted in October 2025 following an informal request by Homeland Security Investigations, occurring absent warrant or court authorization. The plaintiffs do not contest the underlying criminal allegations tied to a $61 million scheme involving deceptive investment tactics and money laundering, yet argue that Tether overstepped its proper role.
A formal seizure warrant from a federal court in North Carolina arrived only in February 2026, months after the initial freeze, directing that the tokens be destroyed and recreated in a government-controlled account. The core dispute centers on whether Tether possessed lawful grounds to act unilaterally on an informal government communication, and whether the subsequent court order properly authorized the destruction and reissuance of the USDT. The case raises questions about the boundaries of private cryptocurrency platform power over user funds when law enforcement requests asset action without established legal procedure.
What remains unclear is how the courts will interpret Tether's obligations to respond to government requests, whether the seizure warrant retroactively validates the earlier freeze, and what precedent this dispute may establish for other stablecoin issuers facing similar demands.