Key Insights:
- Tether News builds on a $42.4M USDT freeze made before a court warrant.
- Plaintiffs challenge Tether’s authority to blacklist, burn, and reissue USDT.
- The lawsuit seeks wallet access, damages, and disgorgement of reserve yield.
Tether News has moved into court after two Thai businessmen challenged a $42.4 million USDT freeze. Nutthawat Rukthammachalern and Natthawat Kasamvilas filed the lawsuit in the Southern District of New York. They say Tether blacklisted their Ethereum wallets before any court issued a warrant.
According to the complaint, Tether restricted ten Ethereum addresses in late October 2025. Those wallets held 42,417,785.62 USDT belonging to the two plaintiffs. The businessmen say an informal request from a Homeland Security Investigations agent caused the freeze. They also say they received no notice before losing access to the funds.
Tether News Focuses on Freeze Before Court Warrant
Kasamvilas allegedly discovered the restriction only after attempting to move the USDT. He later contacted Tether for information about the frozen stablecoin holdings.
According to the complaint, Tether directed him to an HSI email address. The plaintiffs argue that no warrant or court order existed when the blacklist took effect.
The freeze related to Tether USDT was connected to a North Carolina investigation involving alleged pig-butchering fraud. HSI Raleigh opened the case after receiving a victim report involving romance and investment fraud.
Investigators alleged that stolen USDT moved through several wallets to disguise its origin. One plaintiff-linked wallet allegedly held about $26.1 million during that investigation.
That wallet had reportedly been mapped as a consolidation address within the alleged laundering flow. However, the plaintiffs do not seek to stop the government investigation. Their lawsuit instead challenges Tether’s authority to restrict secondary-market USDT before judicial authorization.
February Warrant Ordered USDT Burn and Reissue
A federal court in North Carolina issued a seizure warrant on February 19, 2026. The warrant directed Tether to burn the frozen USDT and reissue equivalent tokens. Those replacement tokens were to be sent to a government-controlled wallet. Five days later, authorities announced a broader seizure exceeding $61 million in USDT.
Authorities linked that seizure to addresses allegedly associated with laundering proceeds from pig-butchering victims.
They publicly thanked Tether for assisting with the transfer. The Thai businessmen do not deny that the authorities claim the disputed funds involve scam proceeds. Instead, the Tether news lawsuit challenges Tether’s actions both before and after the warrant.
The plaintiffs argue that the February warrant cannot immediately authorize the October blacklist. They also question whether it empowered Tether to burn and reissue their stablecoin holdings.
According to their complaint, they acquired the USDT through business transactions. They also say they were not direct Tether customers.
Tether Update: Plaintiffs Seek Unfreezing, Damages and Reserve Yield
The lawsuit asks the court to stop Tether from burning the disputed tokens. It also seeks an order requiring Tether to remove the wallet blacklist. The plaintiffs request damages if their USDT has already been destroyed.
Their claims on the Tether news include conversion, trespass to goods, unlawful gain, and judicial relief. The unfair gain claim addresses income said to be earned from reserves backing the frozen USDT.
The plaintiffs argue that Tether continued earning Treasury-related yield while they could not move their funds. Following that, they want the court to order a refund of that alleged income.
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