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Conduit sues Tether over allegedly freezing $2.8M without explanation
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Cross-border payments platform Conduit Technology has sued stablecoin issuer Tether, alleging that Tether froze $2.76 million in USDt without explanation. The complaint was filed Monday in the US District Court for the Southern District of New York. Conduit says the freeze occurred on September 24, 2025, and that it has been denied access to the money ever since. Tether did not immediately respond to a request for comment on the lawsuit.
Conduit began holding USDt in a digital treasury wallet in May 2025. It alleges Tether froze the entire $2.76 million balance with no justification, an action that "materially impacted its business." The company asserts that Tether has "no legal entitlement" and "no claim" to those funds.
According to the lawsuit, the freeze is connected to a Brazilian federal police investigation launched in 2024 into financial intermediary Bull Intermediação de Negócios and Onix. Conduit says Tether identified its treasury wallet as tied to those companies "on its own initiative using its own criteria." It alleges the stablecoin issuer acted without a court order.
In its complaint, Conduit argues the funds are "unequivocally Conduit's." It says it repeatedly asked Tether to unfreeze the balance, with no result as of Monday. The case spotlights the broad authority stablecoin issuers have exercised over user holdings.
About a month earlier, two Thai nationals sued Tether over $42.4 million in USDt frozen after what they called an "informal request" from US Homeland Security Investigations. The funds were part of a $61 million pig butchering case in the Eastern District of North Carolina, which issued a seizure warrant in February.
The lawsuit raises fresh questions about when and why issuers can block tokens without judicial approval. Conduit is seeking to recover its funds and related damages. Tether has previously said it helped freeze $550 million in Iran-linked USDT this year.
