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Ahmed Barakat
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Attorney Charles Gerstein filed a lawsuit in Manhattan federal court on Thursday seeking use of force pregnancy To transfer 344,149,759 USDT, approximately $344 million, frozen in two Tron wallet addresses identified by OFAC as belonging to Iran’s Islamic Revolutionary Guard Corps.
The plaintiffs are asking the Southern District of New York to force Tether to dispose of the blocked wallets and reissue an equivalent amount of USDT to the wallet controlled by their attorneys.
This request is a direct extension of the previous lawsuit filed by Gerstein, which targeted funds frozen in the country linked to North Korea. resolution Separate case and claims against Railgun DAO.
A bearish signal for stablecoin issuer confidence. If the courts accept this theory of liability, Tether’s administrative freeze controls, designed to comply with sanctions, would become the target of litigation in every jurisdiction where creditors injunctive hold unpaid terrorist rewards.
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How does the theory of responsibility work mechanically, and why the function of freezing the rope is a fulcrum
The mechanism here deserves to be understood carefully. Unlike Bitcoin or Ether, USDT includes administrative controls at the issuer level: Tether can freeze wallets, blacklist addresses, remove balances, and reissue tokens to a new destination address.
Gerstein Argue filing Since Tether has already frozen funds in response to OFAC sanctions for two TRON addresses, the company has demonstrated the technical capacity and practical willingness to act unilaterally on those holdings.
The chain of events takes place as follows. The Office of Foreign Assets Control (OFAC) has designated two Tron wallet addresses as the property of the Iranian Revolutionary Guard. Tether has frozen 344,149,759 USDT held there.
The plaintiffs, who hold billions of dollars in unpaid U.S. court judgments linked to Iran-backed terrorism, now argue that the frozen USDT constitutes prohibited property of a state sponsor of terrorism, making it vulnerable to enforcement under federal law.
The request is not to seize private Tether reserves. It’s a court order that forces Tether to use controls it’s already used, directed to a different destination address.
This distinction is important from an analytical standpoint. The rope has already been frozen $4.2 billion in USDT across 5,000+ wallets Associated with criminal activity and helped the Department of Justice seize more than $6 million linked to a fraud scheme in Southeast Asia.
The plaintiffs argue that Tether is not being asked to do something unprecedented, only to redirect the existing freeze toward creditors rather than leaving the funds in limbo.
The legal precedent being built here is that administrative control over the asset is functionally equivalent to possession, and that possession creates liability towards creditors by a judicial ruling under the correct legal framework.
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