I could be possible. Formaldehyde is used to treat textiles coming into the country to eliminate bugs, ect. I've never had a problem with any yarn or crochet thread myself. I don't know how you would wash crochet thread, but you can very carefully wind your yarn into hanks,tied in several places very loosely and soak in Eucalan, which doesn't need to be rinsed, and hang to air dry. Your bet bet would be to wear rubber gloves while doing this. I hope you find a solution, and even better, find out what is causing the reaction.

Tami

I have reacted to the sizing that some yarn manufacturers use. It washes out, so I always wash a yarn item before gifting it to babies just in case.