Begin with the plumbing. Tether holds administrative functions inside the USDT contract that let it flag an address, after which the tokens stay visible on Ethereum and stop being transferable, and it can burn them outright [15]. No custody changes hands, which is the plaintiffs' entire theory: Rukthammachalern and Kasamvilas say they acquired the tokens in secondary-market business transactions and never opened a Tether account, bought from the company, or agreed to its terms [17]. Their counsel, Mark Beckett, states the absence directly, saying Tether "has no contractual relationship with our clients, is not a custodian of our clients' USDT, and has no legal right or basis to blacklist our clients' accounts" [9].
The money question is smaller than $42.4m and more useful. The complaint says Tether takes in dollars when it mints and buys interest-bearing instruments, mostly US Treasuries held in New York [11], and that freezing a holder's tokens costs the company nothing while the matching reserves keep earning, which the plaintiffs characterise as a financial inducement to freeze and then burn [12]. October 30, 2025 to February 19, 2026 is 112 days [19]. On $42.4m, each percentage point of annual yield across those 112 days is roughly $130,000 [20], which is the actual size of the disgorgement fight, and a court that awards it has put a price on a function that presently has none.
Against the practice, the case is small: $42.4m is 0.96% of the more than $4.4bn that Tether said in April its work with over 340 law-enforcement agencies across 65 countries had helped freeze [16][21]. This is probably wrong, but the branch that should bother a corporate treasurer is the one where the plaintiffs lose on their own ground. If an issuer owes nothing to a holder who never opened an account, then the blacklist is a characteristic of the asset rather than a term of a bargain, and an informal request becomes a lawful way to immobilise a working balance with no obvious defendant. Tether's framing points that way, calling the suit a baseless interference with its law-enforcement work [14].
Three plausible tracks. The parties settle and the addresses quietly unfreeze, and no court reaches the duty question. Or the court reaches it and finds no duty, the outcome above. Or it holds that process was owed before the freeze and returns the reserve income, the only result that changes an incentive; the plaintiffs also argue the February warrant neither retroactively authorised the freeze nor licensed destroying the original tokens before a final forfeiture judgment [7]. What would make the counterparty read wrong: neither account before us says what conduct the warrant alleged [24], and if these ten addresses held proceeds a treasurer can cleanly distinguish from its own, this is a forfeiture dispute and nothing more. It would also collapse if Tether produced legal process dated before October 30 that the complaint omits, though Cryptopolitan calls the gap almost four months [22] and Decrypt more than three [23], and neither describes anything sitting inside it.
