Thai businessmen sue Tether over $42.4 million freeze in $61 million pig butchering case

Two Thai businessmen have sued Tether in New York, claiming the stablecoin issuer froze $42.4 million in USDT in October without a warrant. The case matters for high-risk PSPs because it goes straight at a live question in stablecoin operations: who gets to freeze, burn, and reissue tokens when funds are tied to a fraud investigation.

1. According to the Monday filing, the plaintiffs say Tether froze the funds in October 2025 after an informal request from US Homeland Security Investigations. They allege the freeze happened before any seizure warrant existed.
2. The Eastern District of North Carolina later issued a seizure warrant in February 2026 as part of a $61 million pig butchering case. The warrant directed the burn and reissuance of the tokens to a government wallet.
3. The plaintiffs do not dispute their involvement in the investment scam. Their lawsuit instead challenges Tether’s authority to lock the funds on its own, and asks the court to order the assets unfrozen and award potential punitive damages.
4. Corporate and intellectual property attorney Ariel Givner summed up the dispute in a Wednesday X post: the complaint, in her reading, is not denying the coins were scam proceeds; it is arguing that Tether froze secondary-market holders first, continued earning Treasury yield on the reserves, and only later received a warrant that still does not, in the plaintiffs’ view, authorize a private issuer to freeze, burn, or reissue the tokens.
5. In a separate February case, a US court sentenced a dual national of China and St. Kitts and Nevis to 20 years in prison for running a $73 million pig butchering scam, a reminder that these cases keep landing in court, and that stablecoin controls are becoming part of the enforcement toolkit.

For PSPs and issuers, the practical issue is not the fraud label itself; it is the chain of authority. If funds can be frozen on an informal request, then later retrofitted with a warrant, every stablecoin compliance team has to know exactly where its cutoff is: customer protection, asset control, and legal process do not always arrive in that order.