A pair of Thai businessmen filed suit against Tether in New York district court, alleging the stablecoin issuer unlawfully froze $42.4 million in USDT during October 2025 as part of a wider pig butchering investigation.
According to a Monday court filing, the plaintiffs assert Tether immobilised the $42 million absent any warrant, acting on an informal request from US Homeland Security Investigations. A seizure warrant for the assets was not issued by authorities in the Eastern District of North Carolina until February 2026, within a $61 million pig butchering probe. That warrant instructed Tether to burn the tokens and reissue them to a wallet controlled by the government.
The businessmen do not contest their participation in the investment fraud. Instead, the litigation challenges whether stablecoin issuers possess the legal power to freeze holdings before judicial authorisation arrives. The suit demands that officials release the funds and consider punitive damages.
Corporate and intellectual property attorney Ariel Givner clarified the claim in a Wednesday post on X: the complaint acknowledges the government's assertion that the coins derive from scam activity, but argues Tether locked secondary-market holders first, continued earning Treasury yield on the backing reserves, and only afterwards obtained a warrant that — in the plaintiffs' interpretation — still does not grant a private issuer the authority to freeze, burn or reissue tokens.
In an unrelated matter decided in February, a US court handed a 20-year prison term to a dual citizen of China and St. Kitts and Nevis convicted of running a $73 million pig butchering operation.
Source: cointelegraph.com