Tether faces lawsuit from Thai nationals over $42M asset freeze in pig butchering scheme
While the plaintiffs acknowledged their role in the fraudulent scheme, they argue Tether lacked legal authority to freeze the $42 million at the time of the action.
A pair of Thai businessmen have initiated legal proceedings against Tether, the stablecoin issuer, in a New York district court, alleging the company unlawfully froze $42.4 million worth of Tether USDt (USDT) tokens this past October, in connection with a wider pig butchering fraud investigation.
According to a court filing submitted on Monday, the plaintiffs argue that Tether improperly froze the $42 million without obtaining a proper warrant in October 2025, after receiving what was described as an informal request from US Homeland Security Investigations.
A seizure warrant for the frozen assets was not issued by authorities in the Eastern District of North Carolina until February 2026, months after the initial freeze, as part of an investigation into a $61 million pig butchering scheme. The warrant mandated the burning and reissuance of the tokens to a wallet controlled by the government.
Though the plaintiffs acknowledged their participation in the investment fraud scheme, the legal action challenges the extent of authority that stablecoin issuers possess when it comes to freezing assets. Additionally, the lawsuit demands that authorities release the frozen funds and provide compensation for 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.
Ariel Givner, corporate and intellectual property attorney, in a Wednesday X post
In an unrelated case this past February, a US court handed down a 20-year prison sentence to a dual national of China and St. Kitts and Nevis for masterminding a $73 million pig butchering scam operation.