Thai Merchants Allege Tether Froze $42M USDT on Informal Government Request
A lawsuit filed in the U.S. District Court for the Southern District of New York has brought Tether's asset-freezing practices under legal scrutiny. Two Thai businessmen, Nutthawat Rukthammachalern and Natthawat Kasamvilas, are suing the stablecoin issuer, claiming it froze 42.4 million USDT months before any formal court warrant was issued.
A Three-Month Discrepancy: On-Chain Action Precedes Court Order
The heart of the dispute lies in a significant timeline conflict. Blockchain records confirm that Tether blacklisted ten Ethereum addresses linked to the plaintiffs on October 30, 2025—a batch process completed within two and a half minutes.
However, the seizure warrant cited in the complaint, issued by a U.S. court, is dated February 19, 2026. This indicates Tether's freeze action occurred approximately 112 days before the judicial order was formally granted.
Plaintiffs' Claim: No Direct Contractual Relationship with Tether
The merchants state in their filing that they acquired the USDT on secondary markets and had no direct contractual relationship with Tether. They allege the company acted on an "informal request" from agents of Homeland Security Investigations (HSI).
The complaint notes that on November 2, 2025, when Kasamvilas contacted Tether for information, he was told the company had "no further information," with no disclosure that the assets had already been frozen. The plaintiffs argue this prevented them from seeking timely legal recourse.
Legal Question: Can a Private Company Pre-empt Judicial Process?
The case raises a critical legal issue: does a private stablecoin issuer like Tether have the authority to unilaterally freeze user assets based on an informal government request, prior to any formal court order?
The plaintiffs have brought five claims against four Tether entities, including conversion, trespass to chattels, and unjust enrichment. The case is before Judge Lewis J. Liman.
Tether's Enforcement Record and Broader Implications
Tether has frequently highlighted its cooperation with law enforcement globally. Prior to this case, the company reported assisting in freezing over $4.4 billion in assets, with more than $2.1 billion linked to U.S. authorities.
This lawsuit could set a significant precedent for the cryptocurrency industry. It forces a reevaluation of the power limits of centralized stablecoin issuers, the legal protections for user assets, and the procedural safeguards required when cooperating with law enforcement. The outcome may establish new standards for such operations.