Thai Businessmen Sue Tether Over $42M Freeze in $61M Pig-Butchering Case
Key Takeaways
- •Two Thai businessmen sued Tether in New York district court over the freezing of $42.4 million in USDT connected to a pig-butchering scam.
- •Tether froze the funds in October 2025 without a warrant, acting on an informal request from US Homeland Security Investigations.
- •A seizure warrant was not issued until February 2026 by authorities in the Eastern District of North Carolina as part of a $61 million pig-butchering case.
- •The plaintiffs do not dispute their involvement in the scam but argue Tether lacked authority to freeze, burn, or reissue their tokens, and they seek punitive damages.
- •The lawsuit tests the scope of stablecoin issuers' freezing power, with implications for USDT, the largest stablecoin by market capitalization.
Two Thai businessmen have filed suit against stablecoin issuer Tether in a New York district court, alleging the company illegally froze $42.4 million in Tether USDt (USDT) as part of a broader case connected to a pig-butchering scam. The suit lands amid a broader US enforcement push against such fraud schemes, in which scammers build romantic or trusted relationships with victims before persuading them to invest in fraudulent platforms.
In a court filing submitted Monday, the plaintiffs argued that Tether froze the $42 million without a warrant in October 2025, acting on an informal request from US Homeland Security Investigations. The case highlights a structural feature of major fiat-backed stablecoins: because USDT is issued and redeemed by a single company, Tether can blacklist addresses and render tokens unusable at the smart-contract level — a capability that distinguishes it from decentralized assets like Bitcoin.
Authorities in the Eastern District of North Carolina did not issue a seizure warrant for the funds until February 2026, as part of a $61 million pig-butchering case. That warrant directed the tokens be burned and reissued to a government wallet.
Although the plaintiffs do not dispute their involvement in the investment scam, the lawsuit tests the extent of stablecoin issuers' freezing authority — a question with wide implications for USDT, the largest stablecoin by market capitalization, and for the industry more broadly, as issuers routinely cooperate with law enforcement requests to freeze suspect wallets. It also asks that authorities unfreeze the funds and pay potential punitive damages.
“The complaint is NOT denying that the government claims these coins are scam proceeds. It is saying Tether locked secondary-market holders first, kept earning Treasury yield on the reserves, and only later received a warrant that still does not, in plaintiffs’ view, authorize a private issuer to freeze, burn, or reissue their tokens,” corporate and intellectual property attorney Ariel Givner wrote in a Wednesday X post.
In a separate case in February, a US court sentenced a dual national of China and St. Kitts and Nevis to 20 years in prison for orchestrating a $73 million pig-butchering scam.
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