Tether Sued in US Over $42.4 Million USDT Freeze Before Seizure Warrant
Summary
- Tether has been sued in a US court over its $42.4 million USDT freeze.
- The plaintiffs said Tether carried out the warrantless freeze based only on an informal request from Homeland Security Investigations (HSI).
- The lawsuit is drawing attention to how courts will define the boundary between the freeze authority of centralized stablecoin issuers and due process.
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Tether, the stablecoin issuer, has been sued in US federal court over its freezing of about $42.4 million of USDT. At the center of the case is whether Tether could restrict the assets based solely on a request from investigators before a court issued a seizure warrant.
Cointelegraph reported on September 3 that two Thai businessmen filed the lawsuit against Tether in federal court in New York.
The plaintiffs allege that Tether froze $42.4 million of USDT in October 2025 without a warrant, acting on an informal request from Homeland Security Investigations, or HSI. The funds were reportedly tied to a so-called pig-butchering investment scam involving a total of $61 million.
The dispute turns on the fact that the court warrant came later. The US District Court for the Eastern District of North Carolina issued a seizure warrant for the funds in February 2026, and the warrant called for the related tokens to be burned and reissued to a government wallet.
The plaintiffs did not entirely deny a connection to the fraud case. Instead, they are challenging whether the freeze imposed before the court warrant was lawful.
The lawsuit could prompt a court to determine how far a stablecoin issuer can go in restricting transfers of user assets based only on a request from law enforcement. It also puts the line between the freezing powers of centralized stablecoin issuers and due process at issue.
