Thai businessmen sue Tether over $42M freeze in pig butchering case
Two Thai businessmen have sued Tether in a New York federal court, claiming the stablecoin issuer illegally froze $42.4 million in USDT in October 2025—before authorities issued a formal seizure warrant in a $61 million pig butchering scam case. The lawsuit tests whether Tether had authority to lock funds on an informal request from U.S. Homeland Security Investigations.
The case landed in a U.S. district court this week as Thai businessmen sue Tether over one of the largest stablecoin freezes tied to an investment-fraud probe. Plaintiffs argue Tether acted without legal authority when it locked the tokens months ahead of any court order.
Key Takeaways
- Two Thai businessmen filed suit in New York, alleging Tether illegally froze $42.4 million in USDT in October 2025.
- Authorities in the Eastern District of North Carolina did not issue a seizure warrant until February 2026, as part of a $61 million pig butchering case.
- Plaintiffs do not deny their involvement in the scam but challenge Tether's power to freeze, burn, and reissue tokens.
- The lawsuit seeks to unfreeze the funds and may award punitive damages against the stablecoin issuer.
- Thailand is separately tightening crypto oversight with a new Travel Rule requiring self-custodial wallet checks.
Why did Thai businessmen sue Tether?
In a Monday court filing, the plaintiffs claimed Tether froze $42 million without a warrant following an informal request from U.S. Homeland Security Investigations. According to the complaint, authorities in the Eastern District of North Carolina only issued a seizure warrant later, in February 2026.
That warrant directed the burn and reissuance of the tokens to a government wallet as part of the broader $61 million pig butchering investigation. The businessmen argue Tether had no right to act before formal legal process.
Did the plaintiffs deny involvement in the pig butchering scam?
No. The filing does not dispute that the government claims the coins are scam proceeds. Instead, it focuses on timing and authority: whether a private stablecoin issuer can freeze customer-held tokens before a court authorizes seizure.
Corporate attorney Ariel Givner summarized the argument on X, noting 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."
What does this lawsuit mean for stablecoin issuers?
The case could set expectations for how issuers like Tether respond to law-enforcement requests. If courts side with the plaintiffs, stablecoin companies may face limits on freezing assets without warrants—and potential liability for doing so.
The suit also requests punitive damages and asks authorities to unfreeze the funds. It arrives alongside heightened scrutiny of crypto-linked fraud: in February, a U.S. court sentenced a dual national of China and St. Kitts and Nevis to 20 years in prison for orchestrating a separate $73 million pig butchering scam.
How is Thailand tightening crypto rules?
The lawsuit emerges as Thailand strengthens domestic crypto compliance. The country's Securities and Exchange Commission adopted a Travel Rule requiring digital asset operators to verify control of self-custodial wallets and retain transaction data for five years, with rules taking effect Feb. 27, 2027.
Thailand joins a global push to track crypto transfers under Anti-Money Laundering standards. For more on enforcement and regulation, see our Fintech & Crypto Alerts coverage. Full details of the Tether filing were first reported by CoinTelegraph.