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Texas Firm Battles Bulgarian Police Over $44M USDT Freeze: Are Stablecoin Geopolitics the Next Frontier of Diplomacy?

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Texas’ battle with Bulgaria is more than just a headline. It is a flashpoint in the evolving world of stablecoin cryptocurrency diplomacy. When Tether froze $44.7 million in SDT at the request of Bulgarian police, alleging illicit activity, Riverstone Consultancy (a Texas-based firm) responded with a US lawsuit alleging a procedural violation and lost opportunities.

This case puts stablecoin issuers, law enforcement, and cross-border jurisdictions in direct conflict, and could reshape how global stablecoin freezes are handled in the future.

What sparked the $44.7 million stablecoin cryptocurrency battle between Texas and Bulgaria?

The dispute began in April 2025, when Tether froze $44.7 million from eight wallets controlled by Riverstone, at the request of Bulgarian police. Riverstone claims the freeze was inappropriate and lacked sufficient legal basis under bilateral treaties, alleging that Tether failed to validate the order through Bulgarian judicial authorities.

Meanwhile, Tether points to its terms of service, which allows assets to be frozen in response to official requests. Over the years, Tether has frozen billions associated with fraud and penalties. Riverstone’s lawsuit, now filed in US courts, alleges breach of fiduciary duty, diversion and unjust enrichment due to Tether continuing to earn interest on the backing assets.

The standoff highlights the growing tension when stablecoins span multiple jurisdictions, which govern freezes, and whether issuers will be held liable if they “over-comply” without following due process.

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Have stablecoins frozen become tools of economic soft power?

This case suggests that stablecoins can become geopolitical tools. Since stablecoins like USDT act as global capital railways, freezing them could amount to extraterritorial sanctions or diplomatic pressure. The clash between Texas and Bulgaria suggests that governments may use control of stablecoins as a form of soft power.

Countries are vying to oversee stablecoins, with the EU’s MiCA rules aiming to limit the dominance of the US dollar, and China’s e-yuan asserting its domestic control over digital finance. Meanwhile, US initiatives such as the proposed GENIUS Stablecoin Act seek to strengthen US regulatory superiority. In this context, this lawsuit is not just about $44 million; It is a test of whether private stablecoin companies will become an arm of state policy or guarantors of user rights.

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Could this case redefine cryptocurrency diplomacy and enforcement?

If Riverstone wins (or even imposes a stricter precedent), stablecoin issuers may adopt more defensive legal stances. They may reject or delay freezing requests that lack adequate vetting, whitelisting only those backed by verified treaties or courts. This would shift the implementation process from “immediate freezing” to judicial controls. Conversely, governments may push for treaties mandating real-time compliance by stablecoin companies, and codifying their role in global law enforcement. This threatens to turn issuers into quasi-judges in cross-border disputes, a role they were never designed to play.

If the courts side with Riverstone, it could lead to a freeze on futures contracts, enabling users to sue over access to assets, and forcing stablecoin issuers to build better transparency around the freeze protocols. This cryptocurrency battle between Texas and Bulgaria may represent a shift in how stablecoins, law, and sovereignty intersect — potentially turning a “crypto freeze” into a regular diplomatic tool.

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Key takeaways


  • Texas files Tether lawsuit against Bulgarian police department and asks to freeze $44.7 million

  • Will stablecoin diplomacy change?

    • Texas Firm Fights Bulgarian Police Over $44M USD Freeze: Is Stablecoin Geopolitics the Next Frontier for Diplomacy? appeared first on 99Bitcoins.

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