Victims of Iran attacks seek court order for turnover of $344 million in USDT frozen by Tether

A group of U.S. terrorism judgment creditors asked a Manhattan federal judge 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.

The motion, filed Thursday in the U.S. District Court for the Southern District of New York, argues that Tether has both the technological capability and the 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.

“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,” the filing reads.

The motion cites a November 2025 seizure case in the District of Columbia in which 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. It also notes a separate Ohio case from April 25, 2025, where Tether "burned" tokens from a targeted address and reissued 4,340,000 USDT to a law enforcement-controlled wallet.

Tether froze the wallets in question on April 24, the same day OFAC added them to its Specially Designated Nationals list. 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.

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.

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.