Thai Investors Sue Tether Over $42M USDT Freeze Without Court Order
Tether froze $42.4 million in USDT four months before any warrant authorized the seizure.
1Key Details of the Lawsuit
Two Thai businessmen, Nutthawat Rukthammachalern and Natthawat Kasamvilas, allege that Tether froze their $42.4 million USDT on October 30, 2025, without any court order. The freeze occurred four months before a magistrate judge in North Carolina issued a seizure warrant on February 19, 2026. The plaintiffs demand the release of funds, compensation, and disgorgement of Tether's reserve income.
2Legal Contradictions
Tether's freeze preceded a warrant issued in a 'pig-butchering' scam investigation in North Carolina. The plaintiffs claim they had no connection to the scam and were only notified long after their funds were frozen. Tether maintains it has supported thousands of law enforcement cases globally.
3Tether's Freeze History
Tether has previously coordinated with U.S. authorities on large-scale freezes, including a $344 million freeze in April 2023 linked to illicit activity. In May 2023, it blacklisted 371 addresses and froze approximately $515 million in USDT within just 30 days.
4Plaintiffs' Demands
The plaintiffs seek an injunction to prevent Tether from burning or reissuing the frozen tokens. They also demand the removal of their addresses from the blacklist and disgorgement of Tether's reserve income. The lawsuit includes claims for damages and punitive damages.
5Previous Legal Attempts
On July 31, 2023, the plaintiffs filed a separate application in North Carolina for fund recovery, which yielded no results. The New York case has yet to produce a ruling on ownership or Tether's liability. The outcome could set a significant precedent for the stablecoin industry.
6Pig-Butchering Scams
Pig-butchering scams typically involve fraudsters building fake romantic relationships to lure victims into fake crypto investment platforms. Investigators often trace stolen funds through dozens of wallets before freezing them. The North Carolina warrant alleged over $61 million in USDT was tied to fraud-linked wallets.
7Plaintiffs' Defense
The Thai plaintiffs argue their ten addresses were swept into the investigation without individualized evidence linking them to the scam. Whether the funds were directly connected to fraud or merely transacted with scam-linked addresses will be a key factual dispute.
8Implications for Stablecoin Industry
This lawsuit challenges the legal basis of unilateral freezes by centralized stablecoin issuers like Tether. USDT's smart contract includes an administrative key enabling such actions. The case's outcome could establish a precedent affecting the entire stablecoin industry.