Lawsuits require Tether to transfer $344 million after being frozen

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Attorney Charles Gerstein filed a lawsuit in Manhattan court Thursday, seeking to compel the company Tether A transfer of 344,149,759 USDT, equivalent to approximately 344 million dollars. The money is currently stored in two wallet addresses on the Tron network, which the Office of Foreign Assets Control (OFAC) has identified as belonging to the Iranian Revolutionary Guard.

The plaintiffs are asking the Southern District Court of New York to compel Tether to terminate the closed wallets and return the equivalent amount of USDT to a wallet controlled by their legal staff. The move is a direct extension of the litigation led by Gerstein, which previously focused on fifth-party funding in the case. A choice Associated with North Korea, and opposed to the Railgun DAO.

This move represents a negative signal about confidence in stablecoin providers; If the courts accept this theory of liability, Tether’s suspended securities, designed to be subject to sanctions, could be the target of lawsuits in any jurisdiction where creditors have unpaid claims related to criminal charges.

Liability Theory Mechanism: Why is Tether’s freezing system the bottom line?

It is important to understand clearly the process being followed here; Unlike Bitcoin or Ethereum, USDT includes management controls at the supply level, where Tether can freeze wallets, blacklist addresses, zero zero, and return tokens to the new destination address.

And he’s pointing Gerstein’s notes Given that Tether has already frozen funds in response to OFAC’s citations to two Tron addresses, the company has shown that it has the ability and willingness to take action against the content.

The aftermath of the incident was as follows: OFAC identified two Tron wallets as belonging to the Iranian Revolutionary Guard, and Tether froze the 344,149,759 USDT contained therein. Now, the plaintiffs, who have billions of dollars in unpaid US judgments related to Iran-backed terrorism, say that the frozen USDT funds constitute illegal assets of a state sponsoring terrorism, making them illegal under federal law.

This does not mean confiscating Tether’s reserves, but it is a request for the law for the company to use the controls it used before, but to direct the money to another place. This distinction is very important; While Tether was already frozen $4.2 billion in USDT across 5,000 wallets By cooperating with criminals, it also helped the Department of Justice seize $6 million in money linked to a fraud scheme in Southeast Asia.

The critics argue that they are not asking Tether to do something unprecedented, but simply want it to lead the recent freeze to the benefit of creditors rather than leaving the money in doubt. The legal rule that is being constructed here is that the management of property is a duty equivalent to possession, and that possession creates liability to creditors under the relevant laws.

A note Lawsuits require Tether to transfer $344 million after being frozen appeared for the first time Cryptonews Arabic.

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