Conduit Sues Tether Over Alleged Unjust Freeze of $2.76 Million

Conduit, a cross-border payments firm, has filed a lawsuit against Tether, the issuer of the USDT stablecoin, alleging that Tether froze $2.76 million of its funds without justification. The complaint, filed in the Southern District of New York, claims that Conduit has been locked out of the USDT for over a year and has no legal obligation to Tether. The frozen funds were reportedly used as Conduit's operating bank account to facilitate transactions across more than 100 countries.

The dispute stems from an investigation involving Onix Intermediações, a former Conduit customer. Tether allegedly froze the funds due to this investigation, but Conduit maintains that law enforcement never flagged its treasury wallet for freezing. Additionally, a Brazilian court confirmed that Conduit was not under investigation in the Onix case. Conduit also asserts that Onix had not used its platform since April 2025 and that the frozen wallet never held any of Onix's funds.

The lawsuit seeks not only the release of the $2.76 million in frozen funds but also an additional $2.76 million in damages and profits that Tether has allegedly earned on the reserves backing the blocked USDT. Conduit argues that the freeze has negatively impacted its business operations while Tether continues to benefit from the reserves.