Thai businessmen sue Tether over $42.4 million USDT freeze in pig butchering case
Quick Look
- Two Thai businessmen filed a lawsuit in New York district court alleging Tether illegally froze $42.4 million in USDT in October 2025 without a warrant, following an informal request from US Homeland Security Investigations.
- The freeze was later formalized by a February 2026 seizure warrant in North Carolina tied to a $61 million pig butchering scheme.
- The plaintiffs do not deny the funds may be scam proceeds but challenge Tether’s authority to freeze, burn, or reissue tokens without proper judicial authorization, seeking unfreezing and potential punitive damages.
AI-generated summary
Why It Matters
The lawsuit is tied to a broader $61 million pig butchering scam case in the Eastern District of North Carolina, where authorities issued a seizure warrant in February 2026 for USDT funds. A related case in February resulted in a 20-year prison sentence for a dual national of China and St. Kitts and Nevis for orchestrating a $73 million pig butchering scam.
Two Thai businessmen sued stablecoin issuer Tether in a New York district court, claiming it illegally froze $42.4 million in Tether USDt (USDT) in October, as part of a broader case tied to a pig butchering scheme.
In a Monday court filing, the plaintiffs claimed that Tether illegally froze the $42 million without a warrant in October 2025, following an informal request from US Homeland Security Investigations.
Authorities in the Eastern District of North Carolina only issued a seizure warrant for the funds later in February 2026, as part of a $61 million pig butchering case. The warrant directed the burn and reissuance of the tokens to a government wallet.
While the plaintiffs didn’t dispute their involvement in the investment scam, the lawsuit tests the freezing authority of stablecoin issuers. It also requests that authorities unfreeze the funds and pay potential punitive damages.
“The complaint is NOT denying that the government claims these coins are scam proceeds. It is saying Tether locked secondary-market holders first, kept earning Treasury yield on the reserves, and only later received a warrant that still does not, in plaintiffs’ view, authorize a private issuer to freeze, burn, or reissue their tokens,” wrote corporate and intellectual property attorney Ariel Givner in a Wednesday X post.
In a separate case in February, a US court sentenced a dual national of China and St. Kitts and Nevis to 20 years in prison for orchestrating a $73 million pig butchering scam.
What to Watch
AI outlook — possibilities, not facts
The court will rule on whether Tether’s freeze of USDT tokens complied with legal requirements.
Very likely · Within weeks
Open Questions
- Will the court rule that Tether lacked authority to freeze USDT without a warrant?
- Could this case set a legal precedent for stablecoin issuers’ compliance with law enforcement requests?
- What are the implications for secondary-market holders of USDT in similar scenarios?
