Two Thai businessmen, Nutthawat Rukthammachalern and Natthawat Kasamvilas, have filed a lawsuit against stablecoin issuer Tether over the alleged seizure of $42.4 million worth of USDT.

 

The lawsuit, which was filed by the plaintiffs this week in the U.S. District Court for the Southern District of New York, challenges the seizure of the crypto funds by the stablecoin issuer, alleging that it was carried out without proper legal backing.

 

According to the suit filed with the court, the plaintiffs claim that the seizure involved funds held across 10 Ethereum addresses that were blacklisted by Tether. They allege that the blacklist was created solely based on an informal request from a U.S. Homeland Security Investigations (HSI) agent and without a warrant, court order, or other formal legal process.

 

 

Defending how the funds were obtained, the plaintiffs claimed that the frozen USDT assets were acquired through secondary market business transactions that had no direct relationship with Tether whatsoever.

 

Post-seizure Recovery Efforts

 

After discovering that Tether had frozen the funds October last year, one of the plaintiffs, Natthawat Kasamvilas, emailed the stablecoin issuer to inquire why he could no longer control the funds and asked to regain full custody of them.

 

However, Kasamvilas claimed that Tether replied by asking him to contact a special agent with Homeland Security Investigations (HSI), whose email address the company provided, while failing to provide a legal basis for the freeze.

 

Although earlier this year, in February, a U.S. Magistrate Judge in the Eastern District of North Carolina ordered the seizure of $61 million worth of USDT that was reportedly linked to a pig butchering and money laundering scam, the plaintiffs claim that the seizure of their funds occurred months before the judge issued the order. They also allege that Tether continued to earn yield from the frozen assets.