According to attorney Ariel Givner, two Thai businessmen filed a lawsuit against Tether in the US District Court for the Southern District of New York over ~$42.4 million in frozen USDT. The plaintiffs allege Tether froze their wallets in October 2025 based merely on an informal request from Homeland Security Investigations (HSI) without a warrant or court order.

A seizure warrant was only issued by the Eastern District of North Carolina in February 2026 directing the burn and reissue of the tokens to a government wallet. The funds are allegedly tied to a $61M "pig butchering" laundering case. While not disputing the underlying criminal allegations, the suit challenges Tether authority to freeze assets without prior court orders and questions whether the subsequent warrant authorized burning and reissuing the USDT.