Two Thai businessmen sued leading stablecoin issuer Tether over its freeze of 42.4 million $USDT, alleging the firm blocked the tokens months before U.S. authorities obtained a seizure warrant.

Nutthawat Rukthammachalern and Natthawat Kasamvilas said in an Aug. 31 complaint filed in the U.S. District Court for the Southern District of New York that Tether froze 42.4 million $USDT across 10 Ethereum addresses on Oct. 30, 2025.

They allege Tether acted on an informal request from a U.S. law enforcement agent, with no warrant or other legal process issued until Feb. 19, according to the complaint.

CoinDesk has reached out to Tether for comment but hasn’t heard back at the time of writing.

The plaintiffs said they acquired the $USDT through secondary-market business transactions and had no direct relationship with Tether.

They want the court to order Tether to remove the addresses from its blacklist and prevent it from destroying the frozen tokens and issuing replacements to a government-controlled wallet before a final forfeiture ruling.

The lawsuit also seeks damages and the return of interest or other income Tether earned from reserves backing the frozen $USDT. Its claims include conversion, trespass to chattels and unjust enrichment.

It asks whether Tether could freeze tokens held in private wallets, allegedly before a warrant was issued, and whether the later warrant allows it to destroy them before a court rules they can be forfeited.

The funds appear to be tied to a wider Justice Department investigation involving more than $61 million in $USDT that prosecutors said was stolen through so-called pig-butchering scams, in which fake romantic or social relationships are leveraged to get victims’ funds, and then laundered.

Authorities said victims were directed to fake investment platforms before their funds moved through several wallets. The Justice Department credited Tether with helping transfer seized assets, while the stablecoin issuer described the operation as a recovery with its support.

Neither the businessmen’s ownership claims nor the government’s allegations concerning the disputed $USDT have been decided by a court.