Tether is facing a federal lawsuit over allegations that it blacklisted 10 Ethereum addresses containing 42,417,785.62 USDT on October 30, 2025, months before the government obtained a related seizure warrant. The plaintiffs say the action followed an informal request from a Homeland Security Investigations agent, rather than a warrant, subpoena or court order.
Nutthawat Rukthammachalern and Natthawat Kasamvilas filed the complaint against four Tether entities in the Southern District of New York on August 31, 2026. The case is listed as 1:26-cv-07400.
The central issue is the 112-day gap between the alleged blacklist and a February 2026 seizure warrant. The claims in the complaint have not been adjudicated, and the filing sets out the plaintiffs' account of the events and their requested relief.
Alleged October blacklist
According to the complaint, Tether blacklisted the 10 Ethereum addresses on October 30, 2025. The addresses allegedly held a combined 42,417,785.62 USDT, or roughly $42.4 million.
The plaintiffs contend that Tether acted after receiving an informal request from an HSI agent. They further allege that no warrant, subpoena or court order had been issued at the time the stablecoin issuer imposed the blacklist.
A blacklist can prevent tokens held at designated addresses from moving through Tether’s smart-contract controls. Here, the plaintiffs’ dispute concerns not only whether the assets could be restrained, but also whether the timing and basis of that restraint were lawful.
The court docket identifies the defendants as four Tether entities, but the supplied docket information does not indicate any judicial finding on the merits of the allegations. The case has been brought in federal court in Manhattan, where the plaintiffs will seek to establish their account of the October action.
February seizure warrant and DOJ announcement
A federal magistrate judge in the Eastern District of North Carolina issued seizure warrant No. 5:26-MJ-1267-JG on February 19, 2026. That date was 112 days after the alleged October blacklist, according to reporting by Decrypt.
The timing is the foundation of the complaint. Rukthammachalern and Kasamvilas argue that a warrant obtained in February could not retroactively supply authority for the earlier freeze.
Five days after the warrant was issued, 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 allegedly connected to cryptocurrency investment scams often described as pig-butchering schemes. The Justice Department announcement said Tether assisted in transferring the assets.
The DOJ announcement concerns more than $61 million, while the lawsuit concerns 42,417,785.62 USDT. The information supplied does not establish that every asset referenced in the government announcement is identical to the tokens at issue in the civil case. It does, however, place Tether's alleged October blacklist in a broader enforcement timeline that culminated in a public account of a USDT seizure.
Requested relief and legal dispute
The plaintiffs ask the court to remove the blacklist from the disputed addresses and to bar any burning or transfer of the USDT while the dispute remains unresolved.
In addition, the complaint seeks damages and income the plaintiffs allege was earned on reserves backing the frozen tokens. Those demands are requests for relief, not findings that Tether earned such income or that the plaintiffs are entitled to recover it.
The case therefore turns on an unusually specific sequence: an alleged informal law-enforcement request, a token freeze involving more than $42 million in USDT, and a seizure warrant issued more than three months later. The plaintiffs' position is that the final step cannot validate the first one after the fact.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
Source: Crypto Daily