A Jerusalem family and other plaintiffs have sued Tether in a US federal court, seeking to seize $344 million in USDT that they say belongs to Iran's Islamic Revolutionary Guard Corps. The funds are tied to unpaid court judgments from the 1997 Hamas terror attacks. The case could set a precedent for how courts treat centralized stablecoin issuers when sanctioned assets are involved.
The frozen wallets on Tron
The USDT in question sits in two Tron blockchain wallets that the US Treasury's Office of Foreign Assets Control flagged as IRGC-controlled. Tether froze those wallets back in 2023. The plaintiffs aren't trying to grab the specific tokens in those wallets, though. Instead, they want a court order directing Tether to transfer an equivalent amount of USDT from its own reserves to their legal team's wallet.
Why Tether's structure matters
Tether can freeze wallets and move tokens because it runs a centralized system. That central control is the heart of the plaintiffs' argument: if the company has the power to freeze and transfer, a court can compel it to do so in service of a legal judgment. Tether has already shown it will act against sanctioned entities — it previously blocked Iranian crypto exchange Wallex as part of US-Iran sanctions enforcement.
Same lawyer, different targets
Attorney Charles Gerstein, who filed this suit, has a track record of going after crypto projects over sanctions links. He's filed similar lawsuits against Arbitrum and Railgun DAO, targeting assets tied to North Korea and privacy-focused protocols. This latest case against Tether is the biggest yet by dollar amount.
What comes next
The court will decide whether Tether can be ordered to hand over $344 million in USDT to satisfy an old terrorism judgment. A ruling for the plaintiffs could ripple through the stablecoin industry, giving creditors a new tool to reach frozen assets issued by centralized platforms.
