Tether Accused in Lawsuit of Improperly Freezing 42.4 Million Stablecoins

Tether, the world's most widely-used stablecoin, is facing a lawsuit for allegedly improperly freezing 42.4 million USDT stablecoins. The lawsuit, filed by Thai businessmen Nutthawat Rukthammachalern and Natthawat Kasamvilas, claims the company blocked the tokens months before U.S. authorities received a seizure warrant. Tether maintains its stablecoin is "stable, fully backed, and freely transferable" and can be used in blockchain transactions like U.S. currency.

However, the lawsuit alleges Tether has the technological ability to block token owners from transferring or accessing their USDT at any time. The plaintiffs claim Tether acted on an informal law enforcement request in October of the previous year, while official legal processes weren't initiated until February. The lawsuit seeks to have Tether remove the plaintiffs from its blacklist and issue replacements to a government-controlled wallet before a final forfeiture decision.

Tether claims the case has no merit and is an attempt to interfere with law enforcement efforts. Meanwhile, 21 major banks are planning to introduce a U.S. dollar-denominated stablecoin, potentially branching out to other G7 currencies, as part of a push for programmable money.