Conduit Sues Tether Over Unlawful Freezing of $2.8M in USDT
Crypto payments firm Conduit has filed a lawsuit against Tether, alleging that the stablecoin issuer unlawfully froze $2.76 million in USDT and has refused to release the funds for over a year. The lawsuit, filed in New York, claims that Tether froze the funds in September 2025 and directed Conduit to a contact in the Brazilian Federal Police without providing any context.
Conduit asserts that Tether did not substantively respond to its requests to unfreeze the funds, prompting the firm to seek assistance from Brazilian police. According to Conduit, the police confirmed they had not identified Conduit’s wallet for freezing and were unaware of the criteria Tether used to freeze the funds.
The lawsuit notes that the Brazilian police had requested Tether to freeze wallets linked to Onix Intermediações Ltda, a company that used Conduit’s platform. Onix shares ownership with Bull Intermediação de Negócios Ltda, which was under investigation by the police. However, Conduit maintains that Onix’s funds never interacted with its treasury wallet, which did not even exist when Onix was using Conduit’s platform.
Conduit alleges that Tether acted unilaterally to freeze and seize control of its funds based on undisclosed criteria. The firm claims the freeze has hindered its ability to pre-fund and settle client transactions, leading to employee layoffs and office closures. Conduit is seeking the return of the frozen funds, compensatory damages of at least $2.76 million, punitive damages, and restitution of any interest, income, or profit Tether may have earned from the funds.