Tether Sued for Allegedly Freezing $42M Before a Warrant

Tether is currently embroiled in a lawsuit initiated by two Thai businessmen who claim that the company unlawfully froze $42.4 million in USDT without a warrant. The lawsuit alleges that Tether acted on an informal request from a law enforcement agent before any legal warrant was issued, raising questions about the legality of such actions.

In its defense, Tether has dismissed the lawsuit as baseless, arguing that it is an attempt to undermine the company's cooperation with global law enforcement agencies. The frozen funds are reportedly tied to a larger investigation by the Justice Department into over $61 million in USDT that was allegedly stolen through pig butchering scams, highlighting the complexities surrounding cryptocurrency and law enforcement.

In a related development, U.S. spot XRP ETFs have seen a significant influx of capital, with 11 consecutive days of inflows totaling approximately $170 million. Since their inception, these ETFs have accumulated around $1.68 billion in net inflows, indicating strong investor interest in this asset class. Goldman Sachs has emerged as the largest disclosed institutional holder of XRP, with about $87 million in exposure at the end of Q2, although this exposure is likely attributed to market making and client orders rather than a strategic investment in XRP.

The SEC is also taking steps to adapt to the evolving cryptocurrency landscape. A roundtable is scheduled for September 17th to discuss the implications of 24-hour trading, a practice common in the crypto sector that would represent a significant shift for traditional Wall Street operations. Additionally, the SEC has proposed a rule to redefine transfer agents to better accommodate blockchain technology, signaling a potential regulatory shift that could impact how digital assets are managed and traded.

The ongoing legal issues faced by Tether and the evolving regulatory landscape underscore the challenges and uncertainties in the cryptocurrency market. As Tether navigates this lawsuit, the implications for its operations and its relationship with law enforcement remain to be seen. The developments in XRP ETFs and SEC discussions further illustrate the dynamic nature of the crypto market and the increasing scrutiny it faces from regulators.