Conduit Sues Tether Over Unjustified Freeze of 2.76M USDT

Conduit Technology has filed a lawsuit against Tether over the freezing of $2.76 million in USDT stablecoins, alleging that the freeze has lasted over a year without justification. The company claims that Brazilian police never requested the freeze, and that Tether’s financial crime unit acted unilaterally based on undisclosed criteria. Conduit asserts that the frozen funds were part of its working capital, stored in a Fireblocks wallet created in May 2025. Before the freeze on September 24, 2025, the wallet had processed over 4,427 transactions involving 78 counterparties and more than $1.1 billion in volume.

The lawsuit outlines six claims against Tether, including conversion, unjust enrichment, breach of fiduciary duty, and computer fraud. Conduit is seeking not only the unfreezing of its wallet but also damages of at least $2.76 million, along with an accounting of the profits Tether allegedly earned from the reserves backing the frozen USDT. The company argues that the freeze has caused significant financial strain, leading to employee layoffs and office closures.

Tether has not yet responded to requests for comment. The case raises questions about the legal boundaries of stablecoin issuers’ ability to freeze funds, particularly when acting on their own initiative without law enforcement involvement.