Thai businessmen sue Tether over $42.4 million USDT freeze allegedly made before warrant

Thai businessmen Nutthawat Rukthammachalern and Natthawat Kasamvilas have sued Tether in New York, alleging the stablecoin issuer unlawfully froze $42.4 million in USDT on October 30, 2025, following an informal request from a Homeland Security Investigations agent. A formal seizure warrant was not issued until February 19, 2026, as part of a broader $61 million pig-butchering scam investigation. The plaintiffs deny involvement in the fraud and seek damages, reserve income disgorgement, and an injunction to prevent Tether from burning the tokens. Tether has dismissed the lawsuit as baseless.

Tether USDT freeze timing dispute

• ▪Thai businessmen Nutthawat Rukthammachalern and Natthawat Kasamvilas filed a lawsuit against Tether on August 31, 2026, in the U.S. District Court for the Southern District of New York over the freezing of $42.4 million in USDT.
• ▪Tether blacklisted ten Ethereum addresses containing precisely 42,417,785.62 USDT on October 30, 2025, which the plaintiffs allege occurred nearly four months before any court authorized a freeze.

HSI informal request procedures

• ▪Natthawat Kasamvilas discovered the restriction after attempting a transaction, and upon contacting Tether, the company referred him to a Homeland Security Investigations agent's email address without explaining the legal basis.
• ▪The plaintiffs allege that Tether acted on an informal request from a Homeland Security Investigations agent, with no warrant, court order, or subpoena existing at the time of the October 2025 freeze.

February seizure warrant issuance

• ▪A magistrate judge in the Eastern District of North Carolina issued seizure warrant No. 5:26-MJ-1267-JG on February 19, 2026, directing Tether to burn the USDT at the identified addresses and reissue them to a government-controlled wallet.
• ▪The plaintiffs filed a separate application in North Carolina on July 31, 2026, seeking the return of their funds, but neither that proceeding nor the New York lawsuit has produced a ruling on ownership.

Pig-butchering scam investigation

• ▪Federal prosecutors announced the seizure of more than $61 million in USDT on February 24, 2026, which investigators traced to wallets linked to romance-driven crypto fraud schemes known as pig-butchering scams.
• ▪The plaintiffs argue that their ten Ethereum addresses were swept up in the broader $61 million dragnet without any individualized evidence connecting them to the pig-butchering investment fraud scheme.

Plaintiffs' declaratory relief claims

• ▪The lawsuit asks the court to bar Tether from burning or reissuing the disputed USDT while the case is pending and to force the removal of the plaintiffs' ten addresses from Tether's blacklist.
• ▪The plaintiffs seek declaratory and injunctive relief, damages, punitive damages, and the disgorgement of any reserve income Tether earned from backing the frozen tokens under claims of conversion, trespass to chattels, and unjust enrichment.

Tether's centralized freezing authority

• ▪Tether utilizes the addBlackList and destroyBlackFunds functions within its Ethereum smart contract via a centralized administrative key to unilaterally freeze and burn tokens.
• ▪Tether defended its actions by calling the lawsuit a baseless attempt to interfere with its ongoing work with global law enforcement, including the Department of Justice, to prevent the unlawful use of USDT.