Conduit Sues Tether Over $2.76 Million in Frozen USDT

Payments company Conduit has filed a lawsuit against Tether, seeking the release of $2.76 million in frozen USDT and additional damages. The complaint, filed on October 5 in the U.S. District Court for the Southern District of New York, alleges that Tether froze the funds in a wallet used for Conduit’s operations without providing a reason.

Conduit claims the freeze is connected to a Brazilian investigation into Onix Intermediações, a former customer. However, the company argues that Brazil’s Federal Police did not request the freeze and confirmed they had no knowledge of why Tether took this action. A Brazilian court also verified that Conduit was not a target of the Onix investigation.

The disputed wallet was created in May 2023, a month after Onix stopped using Conduit’s platform. Conduit maintains that the wallet never held funds belonging to Onix. The company is seeking not only the return of the frozen USDT but also at least $2.76 million in damages and earnings from Tether’s reserves backing the frozen stablecoin.

The total demand, including the return of funds and minimum damages, amounts to $5.52 million. The claim for earnings from reserves would add to this amount, though no court-ordered payment has been made yet.