Businessmen Sue Tether Over $42.4M Frozen in USDT Dispute

Two businessmen from Thailand are taking one of crypto's biggest companies to court, claiming their money was locked up without proper legal reasons.

What happened?

Nutthawat Rukthammachalern and Natthawat Kasamvilas filed a lawsuit against Tether in a New York federal court. Tether is the company behind USDT, a type of cryptocurrency called a *stablecoin* (a digital coin designed to always be worth about $1, unlike other cryptos that swing wildly in price).

The two men say Tether froze roughly $42.4 million worth of USDT that they owned, making it impossible for them to move or use their money.

Why was the money frozen?

According to the lawsuit:

• Tether *blacklisted* (blocked) their crypto addresses in October last year
• This was done at the informal request of a U.S. Homeland Security agent — with no warrant or court order
• More than three months later, a judge issued a *seizure warrant* (an official order to take assets), which planned for Tether to destroy the original coins and create new ones for the government

The businessmen argue this warrant did not legally justify the earlier freeze, and that Tether should not destroy their coins before a final court decision.

How can Tether freeze your money?

Here's the surprising part for beginners: Tether has special powers built into USDT's software. It can blacklist any address and even *burn* (permanently destroy) the coins held there. Frozen coins still show up on the blockchain, but they simply can't be moved.

Tether says it works with over 340 law-enforcement agencies in 65 countries and has helped freeze more than $4.4 billion in suspicious assets. CEO Paolo Ardoino has said, "USDT is not a safe haven for illicit activity."

The businessmen's defense

The two men say they bought their USDT through normal business deals on the *secondary market* (buying from other people, not directly from Tether). They claim they never signed up with Tether or agreed to its terms and conditions.

The bottom line: This case raises a big question — should a private company be able to freeze someone's money at an official's informal request, without a court order? The court's answer could affect how much control stablecoin companies have over users' funds.

This is an AI-generated summary. Read the original article at: https://decrypt.co/377171/tether-sued-freeze-42-4-million-usdt