Thai businessmen sue Tether over $42.4 million USDT freeze before court order

Two Thai businessmen have filed a federal lawsuit against Tether, saying the company froze and blacklisted their wallets in October 2025 on the basis of an informal law-enforcement request, months before a U.S. seizure order arrived in February 2026. For PSPs and crypto payment teams, the case goes straight to the awkward question: who gets to freeze funds first, and what legal paper is enough?

1. The plaintiffs say Tether froze 10 Ethereum addresses holding more than $42.4 million in USDT, then added the wallets to a blacklist.
2. According to the complaint, the actual freeze happened 4 months before the official U.S. court order for seizure was issued in February 2026.
3. The plaintiffs argue that Tether acted on an informal law-enforcement request, and they say the funds were only later identified as linked to money laundering.
4. They are asking the court to stop Tether from destroying the frozen tokens and from issuing replacement tokens to a government wallet before the case is resolved, and to remove the addresses from the blacklist.
5. Tether says it was assisting authorities and complying with regulatory requirements. That is the company line; the lawsuit is about whether that process can start before a formal order exists.

For high-risk merchants and crypto PSPs, this is the part to watch: USDT is not just a token balance entry in a wallet. If an issuer can freeze and blacklist addresses before a seizure order lands, then operational control sits much closer to the issuer than many counterparties would like to assume.