Conduit Sues Tether Over Frozen 2.76 Million USDT in New York Court

Conduit has filed a lawsuit against Tether in the Southern District of New York, seeking the release of $2.76 million in frozen USDT stablecoins. The funds have been locked in Conduit's treasury wallet for over a year without explanation, according to the complaint. Conduit claims the freeze has disrupted its operations, as the wallet functioned as its primary operating account for cross-border payments.

The dispute stems from a Brazilian investigation involving Onix Intermediações, a former Conduit customer. Conduit denies any connection to the investigation, stating that law enforcement never flagged its wallet and that a Brazilian court confirmed it was not under investigation. The company also notes that Onix has not used its platform since April 2023, long before the wallet was created.

In its lawsuit, Conduit is seeking the return of the frozen $2.76 million, along with an additional $2.76 million in damages and reserve profits. The company argues that Tether has continued to earn interest on the reserves backing the blocked USDT, further exacerbating the financial harm. The case highlights the risks associated with stablecoin freezes for businesses reliant on digital dollars for settlement infrastructure.