Texas’s battle with Bulgaria is more than a headline; it’s a flashpoint in the evolving world of stablecoin crypto diplomacy. When Tether froze $44.7M in SDT at the behest of Bulgarian police, alleging illicit activity, Riverstone Consultancy (a Texas-based firm) responded with a U.S. lawsuit claiming procedural violation and loss of opportunities.
The case puts stablecoin issuers, law enforcement, and cross-border jurisdictions into direct conflict, and it could reshape how global stablecoin freezes are handled going forward.
What Triggered the Texas vs Bulgaria $44.7M Stablecoin Crypto Battle?
The dispute began in April 2025, when Tether froze $44.7M USDT from eight wallets controlled by Riverstone, acting on a Bulgarian police request. Riverstone claims the freeze was improper and lacked sufficient legal basis under bilateral treaties, alleging Tether failed to validate the request through Bulgarian judicial authorities.
BREAKING: Riverstone Consultancy has filed a lawsuit against Tether, alleging $44.72M in USDT was frozen after an informal request from Bulgarian law enforcement.
The complaint accuses Tether of:
1️⃣ Violating international legal protocols by freezing assets based on a local… pic.twitter.com/RqWpdBF6kf— Jacob King (@JacobKinge) October 15, 2025
Tether, meanwhile, points to its terms of service, which allow freezing assets in response to official requests. Over the years, Tether has frozen billions tied to scams and sanctions. The Riverstone lawsuit, now in U.S. courts, claims breach of fiduciary duty, conversion, and unjust enrichment due to Tether continuing to earn interest on the backing assets.
This confrontation underscores growing tension when stablecoins straddle multiple jurisdictions, who adjudicate freezes, and whether issuers will be held accountable if they “over-comply” without due process.
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This case signals that stablecoins could become geopolitical levers. Because stablecoins like USDT serve as global rails for capital, freezing them can act as extraterritorial sanctions or diplomatic pressure. The Texas-Bulgaria clash suggests that governments may use stablecoin control as a form of soft power.
Stablecoins aren’t an investment – they’re a tool.
Backed by U.S. Treasuries, powering global money flows, and about to face a Cambrian explosion under the GENIUS Act.
I broke it all down on TV 👇 pic.twitter.com/HbJRtVA9Ro
— The Wolf Of All Streets (@scottmelker) August 31, 2025
Countries are competing for stablecoin oversight, with the EU’s MiCA rules aiming to limit U.S. dollar dominance and China’s e-CNY asserting domestic control over digital finance. Meanwhile, U.S. initiatives like the proposed Stablecoin GENIUS Act seek to cement American regulatory supremacy. In that context, this lawsuit isn’t just about $44M; it’s a test of whether private stablecoin firms become arms of state policy or safeguards for user rights.
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Could This Case Redefine Crypto Diplomacy and Enforcement?
If Riverstone wins (or even forces stricter precedent), stablecoin issuers may adopt more defensive legal postures. They might reject or delay freezing requests that lack sufficient vetting, whitelisting only those backed by verified treaties or courts. This would shift enforcement from “instant freeze” toward judicial checks. Conversely, governments may push for treaties mandating real-time compliance by stablecoin firms, codifying their role in global law enforcement. That risks turning issuers into quasi-judges in cross-border disputes, a role they were never designed to play.
I don’t think people have woken up to the fact that all stablecoins can be frozen by a central entity
— mert | helius.dev (@0xMert_) October 15, 2025
If courts side with Riverstone, it could chill futures freezes, empower users to litigate asset access, and force stablecoin issuers to build better transparency around freeze protocols. This Texas vs Bulgaria crypto battle may mark a shift in how stablecoins, law, and sovereignty intersect – potentially turning “crypto freezes” into a regular diplomatic tool.
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Key Takeaways
Texas sues Tether over the Bulgarian police department asking to freeze $44.7M
Is stablecoin crypto diplomacy going to change?
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