Conduit Sues Tether Over $2.76M Frozen for a Year

TL;DR

• Conduit has sued Tether, alleging the stablecoin issuer froze $2.76 million in USDT without explaining its decision.

• The complaint was filed Monday in the Southern District of New York and says the funds have been inaccessible for more than a year.

• Conduit alleges the freeze relates to an investigation involving former customer Onix Intermediações.

• The payments firm says Brazilian authorities did not request a freeze of its treasury wallet and confirmed it was not under investigation.

Cross-border payments company Conduit has filed a lawsuit against Tether, accusing the USDT issuer of freezing $2.76 million of its funds and refusing to release them or explain the action.

The complaint, filed Monday in the Southern District of New York, alleges that Conduit has been unable to access the stablecoins for more than a year.

Conduit says it owes Tether no money and has no obligation to the issuer that would justify withholding the funds. The allegations have not been established by a court.

Conduit Says Frozen Wallet Supported Its Operations

Conduit uses stablecoins, including USDT and Circle’s USDC, to facilitate payments across more than 100 countries.

According to the complaint, the frozen treasury wallet served a role comparable to the company’s operating bank account. Conduit alleges that losing access to those funds has harmed its business.

The dispute centers on Tether’s decision to block the USDT held in that wallet and, according to Conduit, its subsequent refusal to provide an explanation or restore access.

The alleged freeze appears connected to an investigation referred to Brazil’s Federal Police involving Onix Intermediações, a former Conduit customer.

However, Conduit says law enforcement confirmed that it had never identified the payments firm’s treasury wallet for freezing and did not know why Tether had taken action against it.

The company also says a Brazilian court confirmed that Conduit was not under investigation in the case involving Onix.

According to the filing, Onix stopped using Conduit’s platform in April 2025, approximately one month before the treasury wallet was created. Conduit maintains that the wallet never contained any funds belonging to Onix.

These assertions form a central part of the company’s argument that its operating funds should not have been restricted in connection with the investigation.

Lawsuit Seeks Release of Funds and Additional Compensation

Conduit is asking the court to require Tether to release the $2.76 million in frozen USDT.

It also seeks another $2.76 million in additional damages and profits that it alleges Tether earned on the reserves backing the blocked tokens.

The complaint argues that while Conduit has been deprived of access to its operating funds, Tether has continued collecting interest on the corresponding reserves.

The requested relief remains subject to the court’s consideration. The supplied account does not include Tether’s response to the allegations.