Gurhan Kiziloz Wins First Appeal in Bid to Unfreeze $527M in Tether & Assets, Final Verdict by October
A Brazilian federal appellate court has ruled in favor of Gurhan Kiziloz in the first appeal of a case that has kept $527 million in Tether and physical assets frozen since May, though the ruling marks only an initial step in a process that still has further stages to complete.
The Regional Federal Court of the 1st Region (TRF1) issued the ruling Friday, finding that the original freeze had been based on tax and licensing rules that came into force after the conduct they were applied to had already taken place. The panel ordered the case combined into a single docket and issued an injunction beginning a review of the freeze, but the ruling does not release any funds on its own.
The original freeze
The freeze dates to May, when Brazilian authorities took coordinated action against Kiziloz’s business interests on two fronts. Tether Operations Ltd. locked $213 million across 48 USDT wallets within hours of the underlying court order, working directly with Brazilian regulators to identify and map the accounts. A separate order froze $314 million in corporate and physical assets. Combined, the two actions totaled $527 million, among the largest asset freezes brought against a single individual outside U.S. criminal courts.
The freeze stemmed from allegations concerning Kiziloz’s business activities in Brazil between 2021 and 2024, when his companies operated a network of offshore gambling platforms serving Brazilian users and conducted a series of cryptocurrency token sales. Brazil did not formalize licensing rules for online gambling or a registration framework for token issuance until 2024. Brazilian tax authorities subsequently applied those 2024 rules retroactively to the preceding three years.
The basis for the appeal
Kiziloz’s legal team challenged the freeze on the grounds that obligations under a licensing or registration system cannot be applied to conduct that took place before that system existed. The appeal argued that no domestic pathway existed to obtain a gambling license during 2021–2024, and no registration process existed for token issuers during the same period. Brazilian constitutional law places limits on how far back tax and regulatory obligations can be enforced, and the appeal centered on those limits directly.
TRF1’s panel found in the appeal’s favor on that narrow question. In its preliminary findings, the court held that applying a 2024 tax code retroactively to three years of prior conduct exceeded the jurisdictional authority available to the lower court that had ordered the freeze. The panel consolidated the Tether freeze and the physical-asset freeze into one docket and ordered the process of reviewing the restraint to begin.
What the ruling addresses, and what it does not
The ruling concerns the legality of the freeze mechanism itself and standard corporate audits of Kiziloz’s past business operations remain ongoing and unaffected by Friday’s decision. No criminal charges have been filed in connection with the matter at any point, and it continues to be handled as a civil dispute, as it has been since May.
What comes next
The case now moves to the Superior Court of Justice (STJ), which must complete its own review before any funds can be released. Court filings point to October as a target for that review to conclude, though the timeline is contingent on the STJ process proceeding without complication. Brazilian authorities have not indicated whether they intend to contest the appellate court’s findings further. Kiziloz’s legal team has said it is seeking an expedited timeline through the STJ.
Unwinding a consolidated $527 million position, spread across dozens of digital wallets and separate physical holdings, is a more involved process than the original freeze was, meaning the October target represents an outer boundary of the current timeline rather than a guaranteed date.
Why the case has drawn wider attention
Kiziloz was not the only operator active in Brazil’s gambling and cryptocurrency markets during the 2021–2024 period in question. A number of other international sportsbooks and crypto platforms generated significant revenue from Brazilian users during the same window, under the same absence of domestic licensing and registration rules. Had TRF1 upheld the original freeze, the ruling would have established that Brazilian authorities could pursue historical revenue from any operator active in that regulatory gap, a precedent that extends beyond this single case. That is part of why the case has been closely tracked by industry participants beyond Kiziloz’s own companies.
Current status
As of Friday, the $527 million remains frozen. Friday’s ruling is the first appellate decision in the case and represents one step toward a possible release of funds, not a resolution of the matter. The STJ’s review is the next formal stage in the process, and the outcome of that review will determine whether the October timeline holds.
