A legal dispute against Tether in the Southern District of New York has drawn major attention across the crypto community. Riverstone Consultancy filed a lawsuit claiming that Tether froze $44.72 million worth of USDT after getting an informal request from Bulgarian police. The case raises concerns about how stablecoin companies manage frozen funds and deal with unofficial requests from authorities.
Lawyer Bill Morgan called the case “an obvious example of unjust enrichment,” comparing it to exchanges that fail to pass airdrops to users. The comment came after crypto analyst Jacob King shared details of the lawsuit, which accused Tether of profiting from frozen reserves while denying access to Riverstone’s funds.
Point 3 is an obvious example of unjust enrichment.
— bill morgan (@Belisarius2020) October 16, 2025
Another example would be an exchange that does not pass on airdrops or rewards to customers. I can recall one exchange for example that did not pass on songbird to its customers. https://t.co/UWJuh3izGf
Allegations against Tether
The complaint alleges that Tether violated international legal protocols by freezing assets based on a local police request without a formal due process. Riverstone claimed Tether froze eight wallets on April 4 and failed to provide legal justification for the action. The company said Tether directed them to contact Bulgarian authorities, who never responded.
Besides, Riverstone accused Tether of falsely marketing USDT as a liquid and reliable stablecoin while exercising centralized control. The firm alleged that Tether’s ability to freeze wallets contradicts its claim of offering unrestricted and transparent transactions.
Moreover, the lawsuit points to three main accusations: breach of trust, unfair profit, and taking control of funds without permission. Each one centers on claims that Tether made money while blocking Riverstone from using its own assets.
Industry reaction and wider implications
Consensys lawyer Bill Hughes said the issue raises bigger questions about how stablecoins deal with law enforcement. He explained that banks must follow clear legal steps before freezing anyone’s money, but crypto companies don’t have such rules. As a result, users can lose access to their funds without warning or proper protection.
Notable lawsuit against @Tether_to just filed in the SDNY days ago. This was brought by a company that used Tether and woke up one morning to find $45mm in funds frozen, allegedly due to an informal request by Bulgarian law enforcement.
— Bill Hughes 🦊 (@BillHughesDC) October 15, 2025
Riverstone alleges that Tether falsely… pic.twitter.com/62jbAWXleO
Blockchain investigator ZachXBT later said the wallets in question were tied to Ponzi schemes like BETL and Pegasus Ride. He explained that the money’s movement on the blockchain clearly showed suspicious activity, adding, “There’s no way you ‘accidentally’ associate $44.7M with tainted addresses onchain.”
Additionally, the Blockchain Recovery Investment Consortium (BRIC) said that Tether paid $299.5 million to help settle the Celsius bankruptcy case. The move has drawn even more attention to how Tether manages its money and handles big financial disputes.
The case shows it’s becoming difficult to balance law enforcement demands with users’ rights in crypto. It also shows why the industry needs clear global rules to stop unfair fund freezes and protect honest users.