Cynthia Lummis says Tether’s $42.4 million USDT lawsuit exposes legal gap

  • Cynthia Lummis said the Tether lawsuit exposes litigation risks in freezing suspected illicit stablecoins.
  • Tether allegedly froze 42,417,785.62 USDT in two plaintiffs’ Ethereum addresses.
  • Section 305 would permit qualifying temporary holds for up to 30 days, with extensions.

U.S. Sen. Cynthia Lummis said a lawsuit against Tether over the freezing of 42,417,785.62 USDT highlights what she views as a gap in rules governing suspected illicit activity. The complaint, filed by Thai nationals Nutthawat Rukthammachalern and Natthawat Kasamvilas in the U.S. District Court for the Southern District of New York on Aug. 31, 2026, alleges that Tether froze the tokens on Oct. 30, 2025, after an informal request from a Homeland Security Investigations agent. The plaintiffs said the request was not initially supported by a warrant, court order or other legal process directed at Tether, and are seeking restored access, damages and other relief. Lummis said Section 305 of the CLARITY Act would allow covered stablecoin issuers and digital asset service providers to impose qualifying temporary holds without civil liability under certain circumstances. The provision covers holds of up to 30 calendar days, with a possible additional 150-day extension following a qualified written request from a covered law enforcement agency.

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