Two Thai businessmen have filed a federal lawsuit against cryptocurrency firm Tether in New York. The legal challenge claims Tether illegally froze roughly $42.4 million worth of USDT tokens without obtaining a court order or warrant. The action followed an informal request from U.S. federal agents. The lawsuit asks the court to reverse the freeze and prevent Tether from destroying or reissuing the disputed digital assets.
Two businessmen from Thailand have launched a federal lawsuit against stablecoin issuer Tether, challenging the company’s decision to freeze more than $42 million of their digital assets.
The complaint was filed in the U.S. District Court for the Southern District of New York. The plaintiffs argue that Tether acted unlawfully when it blacklisted their cryptocurrency wallets based only on an informal request from law enforcement officers.
The lawsuit involves plaintiffs Nutthawat Rukthammachalern and Natthawat Kasamvilas. According to legal filings, Tether used its smart-contract controls on October 30, 2025, to blacklist ten Ethereum wallet addresses containing precisely 42,417,785.62 USDT.
The plaintiffs allege that Tether took this action without a court warrant, judicial order, or official subpoena. After discovering the transfer restrictions, one of the owners contacted Tether, but the company referred him to an agent at Homeland Security Investigations rather than providing a legal basis for blocking the funds.
In February 2026, federal prosecutors in North Carolina secured a seizure warrant directing Tether to destroy the frozen tokens and mint replacement tokens directly into a government-controlled wallet. The plaintiffs claim this later warrant cannot retroactively justify Tether’s original decision to restrict secondary-market token holders.
The legal filing asks the court to compel Tether to:
- Remove the blacklist status from all ten affected wallet addresses.
- Halt any action that would destroy or reissue the frozen tokens.
- Pay financial damages and surrender reserve income earned while holding the frozen funds.
The dispute is connected to a broader U.S. government investigation into investment fraud schemes in which federal authorities sought the recovery of over $61 million in cryptocurrency. Tether publicly acknowledged assisting federal agents in recovering funds related to that enforcement effort.
Major stablecoin issuers like Tether maintain technical controls within their smart contracts that allow them to block specific wallet addresses from moving tokens. While compliance teams regularly use these tools to assist global law enforcement agencies, the new court case focuses on whether private issuers can restrict user assets before receiving official judicial approval.
This lawsuit raises key legal questions regarding how much authority private stablecoin companies have when responding to informal government requests. The outcome in federal court could establish clear boundaries for how digital asset issuers handle compliance requests, account freezes, and user property rights in the future.
