Two Thai businessmen are suing Tether for freezing their USDT holdings worth tens of millions of dollars based solely on an informal US government request without any warrant or legal authority.
The complaint filed in federal court details how the stablecoin issuer targeted their Ethereum (ETH) addresses using its blacklist capability.
The plaintiffs had no contract or relationship with Tether.
“On October 30, 2025, Defendants used that power against Plaintiffs —strangers to Defendants, with whom Defendants have no contract and no relationship of any kind —freezing tens of millions of dollars of Plaintiffs’ USDT contained in Plaintiffs’ blockchain addresses at the informal request of a U.S. government agent, without any warrant, order, or legal process of any kind directed to Defendants, and without notice to Plaintiffs.”
A seizure warrant came more than three months later on February 19th, 2026, seeking to destroy the frozen USDT and reissue it to a government wallet.
The filing argues that Tether lacks legal possession or control over the assets and has no authority to maintain the freeze, which continues nine months later while the company profits from retaining reserves tied to the tokens.
Tether controls an on-chain blacklist via its addBlackList function, allowing freezes without court orders while investigations proceed, says a technical analysis.
“No court order is required for the freeze itself. Tether can freeze pre-emptively while an investigation is ongoing,” the analysis notes.
The Thai businessman is asking the court for restitution and disgorgement of all interest, yield, income, profits, and other benefits derived from the reserves attributable to the USDT in the addresses during the freeze period, and to impose a constructive trust over those amounts.
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