Conduit Sues Tether Over $2.76 Million USDT Freeze

Conduit Technology has filed a federal lawsuit against Tether, the issuer of the USDT stablecoin, over the freezing of a wallet containing $2.76 million in USDT. The freeze, which began on September 24, 2025, has lasted more than a year, with Conduit arguing that Tether improperly seized working capital without legal justification. The company claims that Brazilian authorities investigating an unrelated firm, Onix Intermediações, never identified Conduit’s treasury wallet for freezing. Instead, Conduit alleges that Tether’s T3 Financial Crime Unit acted unilaterally based on undisclosed criteria.

The wallet in question, created in May 2025, had processed over 4,400 transactions with 78 counterparties and handled more than $1.1 billion in volume before being frozen. As of October 6, 2026, the Tron wallet held $2.756 million in USDT and $33 in TRX. Conduit’s legal team argues that Tether repeatedly directed the company to Brazil’s Federal Police, only to learn that the police confirmed Conduit’s wallet was not part of their investigation.

Conduit asserts that the freeze has severely impacted its operations, leading to layoffs and office closures. The lawsuit includes six claims, such as conversion, unjust enrichment, breach of fiduciary duty, and computer fraud. The company seeks not only the unfreezing of the wallet but also damages of at least $2.76 million and an accounting of the income Tether allegedly earned from the reserves backing the frozen USDT. The case raises broader questions about the legal boundaries of stablecoin issuers’ ability to freeze assets.