👀 Thailand🇹🇭 against Tether🇺🇸: two Thai businessmen🇹🇭 sued the company to demand the return of frozen tokens worth USD 42 million

👀 Thailand🇹🇭 against Tether🇺🇸: two Thai businessmen🇹🇭 sued the company to demand the return of frozen tokens worth USD 42 million

In general, cooperation between cryptocurrency companies and law-enforcement authorities is considered standard practice. However, the case raises questions about whether Tether may have benefited from the freeze.

➡️ What happened❓ — The plaintiffs claim that in October 2025, Tether froze 10 of their wallets based on an unofficial request from the U.S. Department of Homeland Security's Homeland Security Investigations (HSI), without a warrant or court order. A warrant was subsequently issued, but only in February 2026. The plaintiffs do not dispute the status of the funds themselves; rather, they argue that the four-month freeze preceding the court order was unlawful.

➡️ Tether's position: the company describes the case as "baseless" and states that its cooperation with law-enforcement authorities helps prevent the illicit use of USDT.

➡️ How does issuance work❓ — Tether Limited is the issuer of USDT tokens and backs them with reserves, maintaining a 1:1 peg to the USD. For the company to issue a certain amount of tokens, users or partners must transfer fiat currency or its equivalent to Tether's accounts. Conversely, when someone wants to redeem USDT back into fiat currency, the tokens are burned and the user receives the corresponding funds, although that is not the situation in this case.

➡️ The purpose of the lawsuit: the Thai businessmen, who filed the case with the U.S. District Court for the Southern District of New York, are seeking:

⚫️ official recognition that Tether appropriated property belonging to others. The plaintiffs argue that the company not only froze the customers' funds but also generated revenue from the reserves backing the disputed tokens, including U.S. Treasury securities.

⚫️ a court order prohibiting the blocking and burning of the tokens;

⚫️ the release of their assets, as well as damages and the interest income earned by Tether after the funds were frozen;

⚫️ the imposition of sanctions against Tether, in the form of a fine.

⚠️ The outcome of the proceedings remains to be determined; however, the case raises an important question: does a cold wallet provide effective control over an asset managed by its issuer within that wallet❓ In the case of USDT, there is no unequivocal answer. A blockchain may be decentralized, but the token still has an issuer with the ability to prevent its transfer.

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