Tether is facing a new lawsuit in New York after two Thai businessmen accused it of unlawfully freezing $42.4 million of its USDT stablecoin in October, as part of a broader case linked to a “pig butchering” scam.
According to the lawsuit, the freeze took place after an informal request from U.S. Homeland Security investigations, without a seizure warrant being issued at the time. The plaintiffs say this action was taken before authorities in the Eastern District of North Carolina later issued the seizure warrant in February 2026.
The subsequent memorandum stipulates the burning of tokens and their reissuance to a government wallet, adding a new legal layer to the ongoing debate over the powers of stablecoin issuers in dealing with assets linked to fraud or criminal investigations.
Although the plaintiffs did not deny their connection to the fraudulent investment scheme, the case raises a broader question: to what extent can a stablecoin issuer freeze assets based on informal requests before clear court orders are issued?
The case is not only about the $42.4 million, but also touches on trust in compliance and oversight mechanisms within the stablecoin market, especially when funds are tied to cross-border fraud operations.
Australia raises the pressure on unlicensed crypto companies
In a separate but highly important regulatory matter for companies operating in the sector, the Australian Securities and Investments Commission warned crypto firms relying on temporary regulatory exemptions that they have until September 30 to apply for financial services licenses, or face penalties of up to 10% of their annual total revenue.
The regulator said companies that need an Australian Financial Services license must apply before the deadline, or seek to amend an existing license if appropriate. So far, the commission has recorded more than 45 applications related to digital assets.
This regulatory message reflects a clearer trend toward ending the period of operating under a temporary umbrella and forcing companies to settle their legal status before continuing activity. For investors and observers, what is happening in Australia shows that compliance is no longer a secondary option, but a fundamental condition for staying in the market.
Between Tether’s lawsuit in New York and Australia’s tightening stance on licensing, the regulatory landscape in the digital assets sector appears to be entering a tougher phase, where compliance issues intersect with questions of trust, user protection, and the limits of authority held by both issuers and regulators.