Conduit sues Tether over alleged $2.76M USDT freeze

Conduit Technology filed a lawsuit against Tether in the U.S. District Court for the Southern District of New York, alleging that the stablecoin issuer froze $2.76 million in USDT belonging to the company without legal justification.

The cross-border payments platform began holding USDT in a digital treasury wallet in May 2025, according to the complaint. Tether froze the wallet’s entire balance on Sept. 24 after identifying a connection to two Brazilian companies involved in a federal police investigation.

The investigation concerns financial intermediary Bull Intermediação de Negócios and Onix, the lawsuit states. Conduit alleges that Tether linked its wallet to the companies “on its own initiative using its own criteria” and provided no legal basis for blocking the funds.

Conduit contacted Tether several times to request access to the USDT, but the funds remained frozen when the lawsuit was filed. The company alleges that the freeze materially affected its business.

“The funds are unequivocally Conduit’s, but Tether has taken them and is denying Conduit access to them,” the complaint states. It adds that “Tether is not allowed to take money from businesses just because they chose to store that money in Tether’s currency.”

Tether did not immediately respond to a request for comment on the lawsuit.

The case follows a lawsuit filed by two Thai nationals, who alleged that Tether froze $42.4 million in USDT after an informal request from U.S. Homeland Security Investigations. The funds were allegedly connected to a $61 million cryptocurrency investment fraud case in North Carolina. A federal court issued a seizure warrant for the USDT in February.

Tether has also reported helping to freeze $550 million in USDT linked to Iran during 2025. Stablecoin issuers can freeze tokens by blocking the blockchain addresses where they are held, preventing transfers.