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Tether is facing a lawsuit from Texas-based Riverstone Consultancy alleging the stablecoin issuer unlawfully froze $44.7 million in USDT by bypassing international legal protocols. The complaint, filed just one day before Tether blocked another $13.4 million across 22 wallets, claims the company ignored Bulgarian treaty requirements and caused severe financial damage. The case highlights growing tensions between Tether’s role as a compliance enforcer—having frozen $3.2 billion in criminal funds—and concerns over centralized control in what’s marketed as a decentralized financial system.
The recent Tether USDT freezing operation follows a growing pattern of freezes over the past year. In June 2025, Tether blocked $12.3 million in USDT on the Tron network, and in April, it froze 28.6 million USDT across 13 addresses.
One of its most notable actions occurred in March 2025, when Tether halted $28 million in funds tied to Russia-based exchange Garantex, which is under U.S. sanctions. Despite the freeze, blockchain intelligence firm Global Ledger reported the exchange retained around $15 million in active reserves.
These actions underline Tether’s dual role as both a private stablecoin issuer and a de facto compliance gatekeeper for blockchain transactions. Critics argue that while the firm’s cooperation with law enforcement enhances global financial security, it also grants Tether significant centralized control over user funds.
Every Tether USDT freezing operation walks a fine line between compliance and censorship, said David Gerard, a blockchain policy researcher. The power to freeze assets unilaterally challenges the core ideals of decentralization.
Just one day before the latest Tether USDT freezing operation, Texas-based Riverstone Consultancy filed a lawsuit against the company, alleging it unlawfully froze $44.7 million in USDT, leading to major investment losses.
The lawsuit claims that in April 2025, Tether froze eight wallets belonging to Riverstone at the request of Bulgarian authorities. Riverstone contends the firm bypassed the official channels defined under the Bulgarian International Judicial Assistance Treaty, which requires cross-border cooperation to flow through central diplomatic authorities.
Tether’s actions ignored established judicial protocols and caused severe financial damage, said a Riverstone legal representative in a court filing.
According to Riverstone, Tether redirected the company to contact Bulgarian law enforcement directly, but those agencies reportedly failed to respond.
The case could set a major precedent for how stablecoin issuers respond to international law enforcement requests particularly as such requests increasingly rely on cross-border digital evidence and blockchain tracing.
In a September 15 statement, Tether revealed that its Tether USDT freezing operations have frozen more than $3.2 billion in tokens linked to criminal activity, in partnership with 290 law enforcement agencies across 59 countries. The company said it blocked a total of 3,660 wallets during that period.
Tether remains committed to working closely with global regulators to protect users and preserve integrity across the crypto ecosystem, the firm stated.
Experts note that such large-scale freezes demonstrate how centralized control in stablecoins can enhance anti-crime efforts but also raise privacy and sovereignty concerns.
Stablecoin issuers like Tether are becoming enforcement tools in the international financial system, said Sarah Meiklejohn, Professor of Cryptography at University College London. However, transparency about when and why these freezes occur remains essential for user trust.
Tether frequently monitors blockchain transactions for ties to sanctioned entities, darknet marketplaces, or obfuscation tools like Tornado Cash, which the U.S. sanctioned in 2022 for facilitating money laundering.
Such proactive monitoring forms the foundation of each Tether USDT freezing operation, ensuring the firm stays compliant with anti-money-laundering frameworks like the Financial Action Task Force (FATF) standards.
The growing number of Tether USDT freezing operations highlights a deep tension in crypto governance: the need to balance user autonomy with regulatory accountability. While Tether’s ability to intervene has helped curb illicit flows, it also exposes a centralization risk in what is often described as a decentralized system.
Analysts warn that as stablecoins become integral to global payments and DeFi ecosystems, these freeze mechanisms could evolve into powerful regulatory levers, potentially shaping the direction of digital asset policy worldwide.
“Freezes like these may be necessary,” Meiklejohn added, “but they underscore how much trust the crypto ecosystem has placed in a single private entity.”
For now, the Tether USDT freezing operation remains both a compliance tool and a flashpoint in the ongoing debate over who truly controls digital money.
