Thai Investors Sue Tether Over $42.4 Million USDT Freeze

Lawsuit Challenges Blacklisting Before Judicial Seizure Warrant

TL;DR

• Thai investors Nutthawat Rukthammachalern and Natthawat Kasamvilas sued Tether, alleging it froze their USDT before a court authorized the seizure.
• The dispute centers on 10 Ethereum addresses holding $42,417,785.62 and whether Tether had legal authority to blacklist them.
• The plaintiffs seek restoration of the assets, damages and income allegedly earned from reserves backing the frozen tokens.

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Thai investors Nutthawat Rukthammachalern and Natthawat Kasamvilas sued Tether on August 31, 2026, in the U.S. District Court for the Southern District of New York, alleging the stablecoin issuer improperly froze $42,417,785.62 in USDT before a judicial seizure warrant existed. The plaintiffs argue that Tether lacked legal authority to blacklist their assets and also challenge the company's ability to unilaterally restrict transfers through its centralized administrative controls.

The case focuses on 10 Ethereum addresses that Tether blacklisted on October 30, 2025, according to the chronology presented by the plaintiffs. A separate account of the events gives the freeze date as October 30, 2026, creating a date conflict in the available information. The earlier date is the one paired with the subsequent warrant chronology, while the conflicting date remains part of the supplied account and has not been independently reconciled.

According to the plaintiffs, Tether acted after an informal request from U.S. Homeland Security Investigations, or HSI, rather than after receiving an immediate court order. They argue that no warrant had been issued when the assets were first immobilized and that they were not given notice until after the freeze had already taken effect.

A magistrate judge in the Eastern District of North Carolina later issued seizure warrant No. 5:26-MJ-1267-JG on February 19, 2026. The warrant was tied to a pig-butchering investment scam investigation in which investigators alleged that wallets covered by the action had received proceeds connected to romance-driven crypto fraud schemes. The Thai plaintiffs deny participating in the alleged scheme.

The North Carolina action covered a wider set of assets that prosecutors said included more than $61 million in USDT linked to wallets associated with investment fraud. Rukthammachalern and Kasamvilas argue that their addresses were swept into that broader enforcement action without individualized evidence establishing that they were personally involved in the underlying fraud.

The central factual dispute is whether the plaintiffs' wallets directly received scam proceeds or merely interacted with addresses that had themselves transacted with wallets connected to illicit activity further along the transaction chain. Pig-butchering schemes in the supplied information involve fraudsters building fake relationships with victims over extended periods before directing them to fraudulent crypto investment platforms, after which investigators may trace funds through dozens of wallets.