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FollowingTwo Thai businessmen formally sued Tether on Monday, accusing the stablecoin issuer of freezing USDT worth approximately US$42.4 million without legal authorization.
Nutthawat Rukthammachalern and Natthawat Kasamvilas filed a complaint in the Federal District Court for the Southern District of New York. The complaint lists four of Tether's entities as defendants, involving USDTs held in ten Ethereum addresses.
According to the complaint, Tether blacklisted the address in October last year at an informal request from a Homeland Security Investigation agent without holding a search warrant or court order. More than three months later, a federal district judge in North Carolina issued a seizure order requiring Tether to destroy the restricted tokens, mint an equivalent replacement USDT, and transfer them to government-controlled wallets.
The plaintiffs argued that the seizure order neither retroactively authorized the previous freezing nor allowed Tether to destroy the original token before the final confiscation judgment was issued.
As of press time, lawyers for Rukthammachalern and Kasamvilas had not responded to requests for comment.
Tether has management rights in the USDT smart contract and can blacklist cryptocurrency addresses on multiple networks, including Ethereum. Blacklisted tokens can still be visible on the chain, but cannot be transferred. Tether can also destroy USDTs held at these addresses.
In April, Tether said it had worked with more than 340 law enforcement agencies in 65 countries. The company said the collaborations have helped freeze more than $4.4 billion in assets related to suspected illegal activities.
"USDT is by no means a safe haven for illegal activity," Tether CEO Paolo Ardoino said in a statement at the time."We will take immediate and decisive action once a credible connection with a sanctioned entity or criminal network is discovered. Recent events have shown that if platforms act slowly, law enforcement will fail, users will be at risk, and trust will be disrupted."
Rukthammachalern and Kasamvilas stated that they purchased USDT through secondary market transactions, have never opened a Tether account, and have not purchased tokens directly from the company or agreed to its terms of service.
Tether did not respond to requests for comment as of press time.
