Victims Ask NYC Court to Force Tether to Release $344M USDT

A group of U.S. terrorism judgment creditors filed a motion Thursday in the U.S. District Court for the Southern District of New York asking the court to compel Tether to transfer more than $344 million in USDT that the plaintiffs say are frozen in wallet addresses attributed to the Islamic Revolutionary Guard Corps (IRGC). The motion seeks an order requiring Tether to zero out the IRGC‑linked balances and reissue the equivalent amount of new USDT to a wallet designated by the plaintiffs.

The plaintiffs say Tether has the technical ability and the legal duty to turn over the funds under New York turnover law and federal terrorism‑enforcement statutes. The motion cites prior instances in which Tether complied with U.S. enforcement: in a November 2025 seizure case in Washington, the FBI provided a seizure warrant around March 19, 2025 and Tether transferred the equivalent USDT amount to the United States; and in an Ohio matter on April 25, 2025, Tether “burned” tokens from a targeted address and reissued 4,340,000 USDT to a law enforcement‑controlled wallet.

The wallets at issue were frozen on April 24, 2025, the same day the Treasury Department’s Office of Foreign Assets Control (OFAC) added the addresses to its Specially Designated Nationals list, the motion notes. The plaintiffs contend the court may exercise personal jurisdiction over Tether because the firm’s reserves are largely custodied and managed in New York through Cantor Fitzgerald. The filing stresses the request seeks turnover of specific Iranian property interests held in Tether’s custody rather than Tether’s corporate assets.

The creditors are seeking enforcement of terrorism‑related judgments issued over the past two decades. According to the motion, the plaintiffs hold roughly $552.3 million in compensatory judgments and about $1.86 billion in punitive damages across multiple cases. The motion asks the court to order Tether to convert the blocked USDT balances to zero and reissue the corresponding tokens to plaintiffs’ counsel or a law enforcement‑controlled wallet so the judgments can be satisfied.

The filing includes a direct assertion about Tether’s prior compliance: “Tether is required to turn over any property of a judgment debtor that it is capable of turning over, and Tether is concededly and obviously capable of turning over USDT because it has done exactly that in response to many U.S. seizure orders,” the filing reads.

Tether is incorporated in El Salvador and issues USDT, a dollar‑pegged stablecoin used across cryptocurrency markets. The plaintiffs’ legal theory contends tokens linked to designated Iranian entities and held in Tether’s systems constitute property interests subject to turnover. The court will now consider whether to order Tether to convert the frozen IRGC‑linked USDT and remit equivalent tokens to the plaintiffs.