U.S. Creditors Seek Court Order for $344M Tether Transfer from Iran-Linked Wallets

A group of U.S. terrorism judgment creditors filed a motion Thursday in the U.S. District Court for the Southern District of New York seeking to compel Tether to transfer more than $344 million in frozen USDT held in OFAC-blocked wallet addresses attributed to the Islamic Revolutionary Guard Corps, according to the court filing. The motion argues that Tether has both the technological capability and legal obligation under New York turnover law and federal terrorism-enforcement statutes to zero out the IRGC-linked balances and reissue an equivalent amount of new USDT to a wallet designated by the plaintiffs. The filing states: “Tether is required to turn over any property of a judgment debtor that it is capable of turning over, and Tether is concededly and obviously capable of turning over USDT because it has done exactly that in response to many U.S. seizure orders.”

Legal Arguments and Precedent

The motion cites two prior cases as evidence of Tether’s capability to execute the requested transfer. In a November 2025 seizure case in the District of Columbia, the FBI provided Tether with a seizure warrant on or about March 19, 2025, and Tether transferred the equivalent USDT amount to the United States. A separate Ohio case from April 25, 2025, shows Tether “burned” tokens from a targeted address and reissued 4,340,000 USDT to a law enforcement-controlled wallet, according to the filing.

Timeline and OFAC Actions

Tether froze the wallets in question on April 24, the same day the Office of Foreign Assets Control (OFAC) added them to its Specially Designated Nationals list. The filing emphasizes that the action targets the turnover of specific Iranian property interests in Tether’s custody rather than the firm’s own corporate assets.

Jurisdiction and Damages

The plaintiffs argue that the court may exercise personal jurisdiction over Tether because the Salvadoran firm’s reserves are largely custodied and managed in New York through Cantor Fitzgerald. According to the filing, the plaintiffs are seeking to enforce judgments totaling roughly $552.3 million in compensatory damages and $1.86 billion in punitive damages, issued across multiple U.S. terrorism-related cases over the past two decades.