- Gerstein Harrow LLP is seeking a court order to compel Tether to release over $344 million in frozen stablecoins linked to Iranian entities, according to a new motion filed Thursday.
- The motion is part of a lawsuit seeking over $2.3 billion in total damages from Iran and North Korea for alleged state-sponsored terrorism, drawing criticism for repurposing hack victims’ funds.
- Onchain investigator ZachXBT has condemned the law firm’s strategy as “pure evil,” arguing it unjustly targets frozen crypto assets from unrelated exploits.
- The firm has previously used restraining notices against entities like the Kelp DAO to block the transfer of frozen assets from recent hacks.
- The U.S. Office of Foreign Assets Control (OFAC) ordered the freeze of the $344 million in Tether tokens in April, sparking debate over wallet freezes and centralized enforcement.
Law firm Gerstein Harrow LLP filed a motion on Thursday in an enforcement lawsuit, asking a court to compel stablecoin issuer Tether to hand over more than $344 million in frozen USDt. The funds were linked to Iranian entities by the United States Office of Foreign Assets Control (OFAC) in April. Consequently, the motion claims plaintiffs are owed over $532 million in compensatory and $1.8 billion in punitive damages from alleged acts of Iranian terrorism over 25 years.
This filing is part of a broader lawsuit attempting to claim and redistribute digital assets as compensation for victims of unrelated judgments. However, this strategy has drawn sharp condemnation from the cryptocurrency community for delaying repayments to recent hack victims. In May, the same law firm filed a restraining notice against the Kelp DAO, attempting to block transfer of frozen Ether tied to a $293 million exploit.
Critics, including onchain sleuth ZachXBT, argue the firm’s tactics are predatory. “This is a predatory US law firm with a strategy that is pure evil,” he said in an X post from May 1. He added that the firm uses his research on crypto Hacking incidents to justify claims for alleged victims from decades ago with no relation to the exploits.
ZachXBT noted the firm has a history of filing similar claims following hacks on platforms like Harmony and Bybit. Meanwhile, the OFAC-ordered asset freeze has itself sparked mixed reactions regarding the ethics of wallet freezes. The crypto community continues to debate the role centralized issuers play in enforcing such law enforcement requests.
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