Sen. Cynthia Lummis is using a lawsuit over $42.4 million in frozen Tether tokens to press lawmakers to advance the CLARITY Act.
In a Sept. 10 post on X, Lummis said Section 305 would protect issuers and exchanges from certain lawsuits involving temporary transaction holds. She urged senators to advance the bill when Congress returns.
Tether Lawsuit Highlights Freeze Dispute
The lawsuit involves $42.4 million in USDT that Tether froze across two Ethereum addresses. Two Thai nationals sued in New York, alleging that a U.S. Homeland Security Investigations agent informally requested the freeze in October 2025.
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The plaintiffs said the agent had no warrant or court order at the time. When one plaintiff later asked Tether about the freeze, the company directed the questions to the agent, according to the complaint.
In February 2026, a court issued a seizure warrant ordering Tether to burn the frozen tokens and transfer an equivalent amount of USDT to a government-controlled wallet, the complaint said.
Section 305 Sets Temporary Limits
Section 305 covers certain law-enforcement requests and would allow crypto companies to delay transactions for up to 30 days, with extensions possible in some cases.
Lummis said Democrats helped shape the bill and should support it, arguing that the provision could provide greater legal protection for companies responding to government requests to restrict suspicious funds.
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Source: https://coinedition.com/lummis-uses-42m-tether-lawsuit-to-push-senate-toward/
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