Attorney in Arbitrum crypto seizure case now targets Tether over $344 million frozen USDT

US Court Case Targets OFAC-Frozen Crypto Assets Held in Tether Wallets

Victims holding long standing U.S. terrorism judgments against Iran have asked a Manhattan federal court to order Tether to transfer more than $344 million in frozen USDT. The funds are linked to wallets tied to Iran’s Islamic Revolutionary Guard Corps (IRGC), which were previously frozen after sanctions action by OFAC.

The filing argues that since Tether already blocked the wallets, it should be required to reissue an equivalent amount of USDT to a wallet controlled by the victims’ legal team. The plaintiffs include survivors of past terrorist attacks and claim the assets can be legally redirected to satisfy unpaid judgments.

Attorney Charles Gerstein, who is leading the case, says stablecoin infrastructure makes enforcement easier because issuers can freeze and reissue tokens. This approach has also been used in other crypto-related litigation involving hacked or disputed funds.

Tether’s ability to freeze and manage balances is central to the argument, since USDT differs from decentralized assets like Bitcoin. The court has not yet issued a ruling, and the case adds to ongoing debates over how sanctioned crypto assets should be handled in U.S. law.