TLDR Two Thai businessmen sued Tether in a New York federal court over 42.4 million USDT frozen in October 2025. The plaintiffs say Tether blacklisted their wallets after an informal request
Two businessmen from Thailand have taken Tether to court. They filed a lawsuit on August 31 in the U.S. District Court for the Southern District of New York.
The men, Nutthawat Rukthammachalern and Natthawat Kasamvilas, say Tether froze their crypto without proper legal authority. The amount involved is about 42.4 million USDT.
According to the complaint, Tether blacklisted ten Ethereum addresses on October 30, 2025. Those addresses held exactly 42,417,785.62 USDT.
The plaintiffs claim Tether acted after getting an informal request from a Homeland Security Investigations agent. They say there was no warrant, court order, or subpoena at the time.
Kasamvilas found out about the freeze when he tried to make a transaction. It did not go through.
He then contacted Tether. The company allegedly pointed him to an HSI agent’s email instead of explaining the legal reason for the block.
Tether used a function in its smart contract called addBlackList. This stops tokens at certain addresses from moving.
The plaintiffs say they got the tokens through normal business deals on the secondary market. They claim they never had a direct account with Tether.
Their argument is that Tether having technical control over the contract does not mean it has legal rights over tokens owned by someone else.
UPDATE – It appears that the $42.4M Tether freeze in this suit stems from a North Carolina pig-butchering case.
HSI Raleigh opened it from a victim tip: romance/investment fraud, fake trading platform, then layering through wallets so the stolen USDT would look clean.
— Ariel Givner (@GivnerAriel) September 1, 2026
A seizure warrant was issued on February 19, 2026, by a magistrate judge in North Carolina. The warrant told Tether to burn the USDT at the flagged addresses.
It also said Tether should mint new tokens and send them to a wallet controlled by the government.
Five days after the warrant, prosecutors announced they had seized more than $61 million in USDT. They said the funds came from wallets tied to investment scams, often called pig-butchering schemes.
Investigators said the case began with a tip from a victim. They traced the money through several wallets meant to hide where it came from.
The Justice Department thanked Tether for its help. Tether confirmed it took part in the $61 million operation.
But the new lawsuit says the plaintiffs’ 42.4 million USDT was still frozen when they filed their case. Court records do not show that these specific tokens were sent to the government wallet.
The lawsuit raises a bigger question. It asks whether a stablecoin company can freeze tokens based on an informal request, before any court gets involved.
The plaintiffs also argue the February warrant cannot retroactively make the October freeze legal. They are asking the court for an injunction, damages, and the return of any income earned from the frozen reserves.
Tether had not filed a public response to the lawsuit as of September 2. The claims include conversion, trespass to chattels, and unjust enrichment.
This is not an isolated freeze. Tether reportedly froze $514 million across 370 addresses in one month earlier in 2026.
Separately, the plaintiffs told the New York court they had already filed a request in North Carolina on July 31, asking for their USDT back. That request has not been decided either.
The post Tether Sued Over Frozen $42.4 Million USDT appeared first on Blockonomi.
