Tether is facing a lawsuit from two Thai businessmen who allege the company froze $42.4 million in USDT in October 2025 after an informal request from U.S. officials, without a subpoena, court order, or other formal legal process. According to the complaint, a formal seizure order was only obtained more than three months later, after which Tether was instructed to destroy the frozen USDT and issue an equivalent amount of new tokens to a government wallet. The case centers on Tether’s blacklist and token-destruction functions, which allow the issuer to freeze addresses and permanently remove funds from circulation. The frozen USDT was allegedly linked to a pig butchering scam investigation, while the plaintiffs claim they acquired the tokens lawfully and deny any connection to the case. The dispute has intensified scrutiny of stablecoin issuers’ authority to freeze assets and the legal standards used to exercise that power.