Two Thai businessmen have sued Tether over the freezing of 42.4 million USDT, alleging the stablecoin issuer blacklisted their Ethereum addresses following an informal U.S. law-enforcement request months before a court authorized the seizure.
Nutthawat Rukthammachalern and Natthawat Kasamvilas filed the federal complaint on August 31 in the U.S. District Court for the Southern District of New York. The case names Tether Holdings, Tether International, Tether Operations and Tether Investments as defendants.
Tether Freeze Preceded February Seizure Warrant
The plaintiffs allege Tether blacklisted 10 Ethereum addresses containing exactly 42,417,785.62 USDT on October 30, 2025 after receiving an informal request from a Homeland Security Investigations agent.
No warrant, subpoena or court order directed Tether to freeze the assets at that time, the plaintiffs allege. A magistrate judge in the Eastern District of North Carolina later issued seizure warrant 5:26-MJ-1267-JG on February 19, 2026, nearly four months after the blacklist was imposed.
The addresses became part of a broader federal investigation into cryptocurrency investment fraud. U.S. authorities ultimately seized more than $61 million in USDT traced to wallets allegedly used to receive and launder proceeds from pig-butchering scams. Tether assisted investigators with transferring the seized assets.
The plaintiffs maintain that they acquired their USDT through secondary-market business transactions and deny participating in the underlying fraud.
Lawsuit Challenges Tether’s Blacklist Authority
The case seeks a declaratory judgment over Tether’s authority to immobilize USDT held by secondary-market owners without formal legal process.
Rukthammachalern and Kasamvilas are pursuing claims including conversion, trespass to chattels and unjust enrichment. They also seek an injunction removing the affected addresses from Tether’s blacklist, protection against destruction of the tokens, damages and disgorgement of yield allegedly earned from reserve assets backing the immobilized USDT.
The dispute targets a central feature of issuer-controlled stablecoins. Tether can use smart-contract controls to prevent specified addresses from transferring USDT, a mechanism repeatedly deployed in coordination with sanctions authorities and law enforcement.
That capability has already produced much larger freezes. Tether blacklisted about $515 million across 371 Ethereum and Tron addresses during a 30-day period earlier this year. Another enforcement action froze $344 million across two Tron wallets linked to suspected sanctions evasion.
$42.4M Remains Tied to $61M Fraud Case
The North Carolina investigation began after HSI received a victim report involving a fraudulent crypto investment platform. Investigators traced stolen funds through multiple wallets as operators attempted to obscure their origin and ownership.
The New York lawsuit does not determine whether the $42.4 million constitutes criminal proceeds. It challenges Tether’s actions before the February warrant and seeks judicial review of the issuer’s authority over USDT acquired outside a direct customer relationship.
The case is Rukthammachalern et al. v. Tether Holdings, S.A. de C.V. et al., No. 1:26-cv-07400, in the Southern District of New York.
