Conduit sues Tether over $2.76 million USDT freeze

Key points

• Conduit sued Tether in the Southern District of New York over $2.76M in frozen USDT
• Cointelegraph says the freeze began Sept. 24, 2025, tied to a Brazilian probe
• Conduit seeks the funds back plus another $2.76M in damages and profits
• The claims are allegations; Tether had not responded to Cointelegraph

Cross-border payments company Conduit has sued stablecoin issuer Tether in federal court in New York, alleging Tether froze $2.76 million of its USDT without justification and has kept the money out of reach for more than a year, according to The Block. The complaint was filed Monday in the U.S. District Court for the Southern District of New York.

What Conduit alleges in the complaint

Conduit says it began holding USDT in a digital treasury wallet in May 2025. Cointelegraph reported that Tether froze the full $2.76 million on Sept. 24, 2025, and that Conduit says the move materially affected its business. The company describes the frozen wallet as the equivalent of its operating bank account, The Block reported. It says the wallet supported operations in more than 100 countries using USDT and Circle’s USDC.

According to the filing as described by The Block, Conduit states that it owes Tether no money and has no obligation to the issuer. Conduit also says it asked repeatedly for the funds to be unfrozen and that the request had not been resolved when the suit was filed, Cointelegraph reported.

Cointelegraph quoted the complaint as saying the funds are “unequivocally Conduit’s,” and that Tether has taken them and is denying access.

The Brazil investigation link

The freeze is allegedly tied to a Brazilian federal police investigation opened in 2024 into the financial intermediary Bull Intermediação de Negócios and a company called Onix. Cointelegraph reported that, per the complaint, Tether linked Conduit’s wallet to those companies on its own initiative, using its own criteria.

The Block reported that Onix Intermediações, a former Conduit customer, stopped using the platform in April 2025, about a month before the frozen treasury wallet was created. Conduit also says Brazilian law enforcement never flagged its wallet for a freeze and that a Brazilian court confirmed Conduit was not under investigation in the Onix matter, according to The Block.

What Conduit is seeking

Conduit asks the court to order the return of the $2.76 million. It also seeks an additional $2.76 million in damages and in profits Tether allegedly earned on the reserves backing the frozen stablecoins, The Block reported. Conduit argues that Tether continues to earn interest on those reserves while the funds are frozen.

The complaint is available on CourtListener. Cointelegraph said it contacted Tether for comment and had not received an immediate response. Tether’s position on the allegations was not available in the reports reviewed.

A second freeze dispute in court

Cointelegraph noted that the suit follows a separate case in which two Thai nationals sued Tether over a freeze of $42.4 million in USDT. In that case, the plaintiffs allege the freeze followed an informal request from U.S. Homeland Security Investigations.

Tether, like other stablecoin issuers, can freeze tokens at specific addresses. The Conduit complaint tests whether an issuer can do so on its own assessment of a wallet’s links to a foreign investigation, when the holder says it has no obligation to the issuer. The court has not ruled on any of the claims, which remain allegations.