Texas Company Fights Bulgarian Authorities Over $44M USDT Frozen Assets: Is Stablecoin Geopolitics the Upcoming Frontier in Diplomacy?

The confrontation between Texas and Bulgaria transcends mere headlines; it symbolizes a critical moment in the ongoing narrative of stablecoin crypto diplomacy. When Tether halted $44.7M in SDT at the request of Bulgarian authorities, citing illegal operations, Riverstone Consultancy, a firm based in Texas, countered with a U.S. lawsuit accusing procedural breaches and missed opportunities.

This lawsuit places stablecoin issuers, law enforcement agencies, and international jurisdictions at odds, potentially redefining the framework for future global stablecoin freezes.

What Sparked the $44.7M Stablecoin Crypto Dispute Between Texas and Bulgaria?

The conflict erupted in April 2025 when Tether froze $44.7M USDT from eight wallets owned by Riverstone, acting upon a request from Bulgarian police. Riverstone contends that the freeze was unjustified and lacked adequate legal foundation under bilateral agreements, arguing that Tether did not authenticate the request through Bulgarian judicial bodies.

BREAKING: Riverstone Consultancy has initiated legal action against Tether, claiming $44.72M in USDT was frozen following an informal plea from Bulgarian law enforcement.

The lawsuit accuses Tether of:
1⃣ Breaching international legal protocols by halting assets based on local… pic.twitter.com/RqWpdBF6kf

— Jacob King (@JacobKinge) October 15, 2025

On the other hand, Tether cites its service terms that empower asset freezing in response to official inquiries. Over time, Tether has frozen billions associated with fraud and sanctions. The Riverstone lawsuit, which is currently in U.S. courts, alleges a violation of fiduciary duty, unlawful conversion, and unjust enrichment, as Tether continues to accrue interest on the underlying assets.

This incident highlights the escalating friction as stablecoins traverse various jurisdictions, raising questions about who oversees freezes and if issuers face repercussions for potentially “over-compliant” actions lacking due process.

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Are Stablecoin Freezes Transforming into Instruments of Economic Soft Power?

This case indicates that stablecoins might evolve into geopolitical instruments. Given that stablecoins like USDT serve as essential mechanisms for global capital flow, freezing them could function as extraterritorial sanctions or a form of diplomatic leverage. The Texas-Bulgaria dispute implies that nations might exploit control of stablecoins as a means of soft power.

Stablecoins aren’t merely an investment – they’re a strategic tool.

Supported by U.S. Treasuries, facilitating worldwide monetary transitions, and on the brink of a vast expansion under the GENIUS Act.

I discussed it in detail on TV pic.twitter.com/HbJRtVA9Ro

— The Wolf Of All Streets (@scottmelker) August 31, 2025

Nations are vying for dominance over stablecoin regulation, with the EU’s MiCA regulations aiming to curb U.S. dollar hegemony while China’s e-CNY is asserting national authority in digital finance. Concurrently, U.S. proposals like the suggested Stablecoin GENIUS Act are striving to solidify America’s regulatory leadership. Within this framework, the lawsuit transcends the mere sum of $44M; it serves as a barometer for whether private stablecoin entities act as extensions of state policies or protectors of user rights.

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Could This Case Change the Landscape of Crypto Diplomacy and Enforcement?

Should Riverstone prevail (or even instigate more stringent precedents), stablecoin issuers may adopt a more protective legal approach. They could refuse or delay freeze requests lacking adequate scrutiny, approving only those endorsed by verified treaties or judicial authorities. This would transition enforcement from “immediate freeze” to judicial oversight. In contrast, governments may advocate for treaties that enforce prompt crypto law by stablecoin companies, formalizing their role in international law enforcement. This scenario risks transforming issuers into quasi-judges in international matters, a role they were not intended to occupy.

I don’t believe people have recognized that all stablecoins can be halted by a central authority.

— mert | helius.dev (@0xMert_) October 15, 2025

If the courts side with Riverstone, it could deter future asset freezes, empower users to pursue legal recourse for asset retrieval, and compel stablecoin issuers to enhance transparency in freeze protocols. This Texas vs Bulgaria cryptocurrency dispute could signify a pivotal change in the interaction between stablecoins, legal frameworks, and national sovereignty – potentially transforming “crypto freezes” into a conventional diplomatic instrument.

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The post Texas Firm Battles Bulgarian Police Over $44M USDT Freeze: Are Stablecoin Geopolitics the Next Frontier of Diplomacy? appeared first on 99Bitcoins.