Two Thai businessmen have filed a lawsuit against the stablecoin issuer Tether in a New York federal court, claiming that the company froze approximately $42.4 million USDT without a court order or search warrant. The focus of the case is whether the stablecoin issuer had sufficient legal authority to impose restrictions on the assets on the blockchain.
The lawsuit involves 10 Ethereum addresses.
The complaint documents show that the plaintiffs are Nutthawat Rukthammachalern and Natthawat Kasamvilas, and the case was filed with the United States District Court for the Southern District of New York. The defendants include 4 Tether-related entities, with the disputed assets distributed across 10 Ethereum addresses.
The plaintiff claimed that Tether added these addresses to the blacklist last October due to an informal request from a member of the U.S. Department of Homeland Security Investigations Bureau, but at that time, there was no search warrant or court order.
The plaintiff claims that the freeze occurred prior to the seizure order.
The complaint states that it was three months later before a federal magistrate in North Carolina issued an attachment order. The plan proposed that Tether destroy the restricted tokens, re-mint an equivalent amount of USDT, and then transfer them to wallets under government control.
The plaintiff believes that this seizure order does not retrospectively authorize the freezing actions that occurred prior to it, nor does it permit Tether to destroy the original tokens before a final confiscation judgment is rendered.
Tether has disclosed the scale of law enforcement collaboration
Two plaintiffs stated that these USDT tokens originated from secondary market commercial transactions. They have never opened an account on Tether and have not purchased tokens directly from the company, therefore they did not agree to its service terms.
USDT The smart contract retains management permissions, and Tether allows addresses to be blacklisted on multiple networks, including Ethereum. Tokens that are blacklisted will still be visible on the chain, but they cannot be transferred. The company can also destroy the USDT in these addresses.
Tether stated in April of this year that the company was cooperating with over 340 law enforcement agencies in 65 countries, and claimed that such collaboration had helped freeze assets worth more than $4.4 billion suspected of being involved in illegal activities. As of Decrypt, Tether has not yet responded to this lawsuit.
