Thai Businessmen Sue Tether Over $42.4 Million USDT Freeze

USDT is a U.S. dollar-pegged stablecoin centrally issued by Tether. Even when it circulates on the public Tron blockchain, the issuer can blacklist designated addresses to prevent transfers or redemptions. The case shows that the U.S. Treasury Department's Office of Foreign Assets Control, or OFAC, can work with industry participants to trace sanctions evasion and criminal funds. It also underscores that such "digital dollars" remain subject to law enforcement action.

On April 23, 2026, Tether froze more than 344 million USDT across two Tron addresses at the request of OFAC and U.S. law enforcement agencies. The addresses held approximately 212.9 million and 131.3 million USDT, respectively. On May 15, U.S. law firm Gerstein Harrow LLP filed a court motion seeking the turnover and distribution of the Iran-linked assets to existing judgment creditors.

USDT, the largest U.S. dollar stablecoin, is managed by centralized issuer Tether. The company can remotely freeze tokens in specific wallets at the request of law enforcement agencies, making it a key partner for the U.S. Department of Justice and Homeland Security Investigations in tracing funds linked to money laundering, fraud and sanctions evasion.

Tether said on February 27, 2026, that it had frozen about $4.2 billion in crime-linked USDT to date, including $3.5 billion since 2023. The Justice Department and Homeland Security Investigations previously announced on February 24 that they had seized about $61 million in funds tied to fraud and money laundering with Tether’s assistance.

“Pig butchering” scams build trust through romantic or social relationships before inducing victims to transfer crypto assets to fraudulent trading platforms. The purported profits are fictitious, and victims are asked to pay taxes or fees when they try to withdraw funds. The case is significant because although USDT circulates on a blockchain, issuer Tether can still legally assist in freezing and transferring it, making asset recovery across multiple wallets possible.

On February 24, 2026, the U.S. Attorney’s Office for the Eastern District of North Carolina announced that federal agents had seized more than $61 million in USDT. Homeland Security Investigations’ Raleigh office opened the investigation after receiving a report from a victim and traced the funds through multiple laundering wallets to addresses that still held substantial balances. The Justice Department confirmed that Tether helped transfer the assets, which will now be subject to forfeiture proceedings.