Conduit Sues Tether Over Frozen $2.76 Million USDT Wallet

Conduit Technology has filed a lawsuit against Tether over the freezing of its $2.76 million USDT treasury wallet. The company claims Tether locked the funds without providing a reason and has kept them frozen for over a year. The lawsuit, filed on October 5, 2026 in the US District Court for the Southern District of New York, names four Tether entities as defendants. Conduit argues that the freeze has severely impacted its operations, leading to layoffs and office closures.

The dispute centers on Tether's power to freeze USDT wallets, as outlined in its terms of service. Conduit maintains that the freeze was unjustified and unrelated to any compliance issues. The company describes itself as a cross-border payments platform and asserts that the frozen wallet was used solely for working capital, separate from customer transactions.

Conduit alleges that Tether's T3 Financial Crime Unit acted without authority, freezing the wallet based on criteria that remain undisclosed. The company also claims that Brazilian authorities did not identify its wallet for freezing. The lawsuit seeks a court declaration that Tether lacks the legal authority to freeze its assets, as well as an order to unfreeze the wallet.

As of October 6, 2026, Tether had not responded to the allegations. The case is in its initial stages, with no docket entries for a Tether response or hearing date available. The outcome of this lawsuit could set a precedent for similar disputes involving Tether's freeze authority.