Overview
- The lawsuit filed in the Southern District of New York on August 31, 2026 challenges Tether’s October 30, 2025 blacklist of ten Ethereum addresses holding 42,417,785.62 USDT and says no warrant or court order authorized that initial freeze.
- Plaintiffs Nutthawat Rukthammachalern and Natthawat Kasamvilas say they bought the USDT on the secondary market and had no direct contract with Tether, arguing technical control of the smart contract does not give Tether legal authority over third‑party holdings.
- A North Carolina magistrate issued a seizure warrant on February 19, 2026 that directed Tether to burn frozen tokens and reissue equivalent USDT to a government wallet, and prosecutors later announced a broader seizure of more than $61 million that credited Tether’s cooperation.
- The complaint seeks removal of the blacklist, an injunction to stop any burn, damages if tokens are destroyed, and disgorgement of income Tether earned on reserves backing the frozen USDT, citing smart‑contract functions named addBlackList and destroyBlackFunds used to block and burn tokens.
- The case tests whether a private stablecoin issuer can act on informal law‑enforcement requests before judicial process and comes as reporting shows Tether has carried out large‑scale freezes that raise questions about due process for secondary‑market holders.