Conduit sues Tether over $2.76 million in frozen USDT
Cross-border payments company Conduit Technology has filed a lawsuit against Tether over $2.76 million in USDT frozen from its corporate treasury wallet since September 2025. Conduit alleges that no court order or government request specifically targeted its wallet, claiming that Brazilian police never identified it among addresses requested for freezing by authorities. The lawsuit, filed on October 5 in the U.S. District Court for the Southern District of New York, names Tether Holdings, Tether International, Tether Operations, and Tether Investments as defendants. Conduit seeks access restoration, damages, and punitive damages, arguing that the freeze has negatively impacted its payments business.
The dispute stems from a Brazilian Federal Police investigation opened in 2024 into financial intermediary Bull Intermediação de Negócios and related company Onix Intermediações. Conduit previously provided payment services to Onix but ended the relationship before the wallet in question was created. The company claims that neither Onix nor Bull owned the wallet, deposited money into it, or used it for transactions. According to the complaint, Brazilian police shared a set of suspected cryptocurrency addresses with Tether’s T3 Financial Crime Unit, but Conduit’s address was not on that list. The freeze occurred in September 2025, with the address still holding approximately $2.76 million in USDT as of September 2026.
Tether’s terms allow it to freeze tokens when required by law or government authorities, or when it considers restrictions prudent under its policies. Conduit challenges whether these terms gave Tether legal authority over its specific holdings. The lawsuit argues that Tether had no ownership claim to Conduit’s USDT and that no enforceable contract between the parties authorized the freeze. Conduit alleges that the freeze hurt its business, reducing liquidity available for pre-funding payment routes and leading to lower transaction capacity, layoffs, and office closures.
Conduit’s efforts to recover the funds continued into 2026, with lawyers contacting Tether in June and sending a formal demand in August. The lawsuit includes claims of conversion, unjust enrichment, breach of fiduciary duty, and alleged violations of federal computer-fraud law. Beyond restoring access to the wallet, Conduit seeks damages for alleged losses tied to the freeze and punitive damages if the court finds them warranted. The company also requests an accounting and the return of any income generated from the assets backing the blocked USDT.