Conduit Sues Tether Over $2.8M USDT Freeze Without Explanation

Cross-border payments platform Conduit Technology has filed a lawsuit against stablecoin issuer Tether, alleging the company froze $2.76 million in USDt (USDT) without justification in September 2025. Filed in the US District Court for the Southern District of New York, the complaint claims Tether had "no legal entitlement" to the funds, which were held as part of Conduit's digital treasury wallet since May 2025. Conduit stated the freeze "materially impacted its business" and argued that "Tether is not allowed to take money from businesses just because they chose to store that money in Tether's currency."

According to the lawsuit, the freeze was linked to a Brazilian federal police investigation launched in 2024 into financial intermediary Bull Intermediação de Negócios and Onix. Tether allegedly flagged Conduit's treasury wallet as connected to those companies "on its own initiative using its own criteria," blocking access to the full $2.76 million on Sept. 24, 2025. Conduit said it repeatedly requested that Tether unfreeze the funds but had received no response as of the filing date. Cointelegraph reached out to Tether for comment but did not receive an immediate reply.

The Conduit case comes roughly a month after two Thai nationals filed a separate lawsuit against Tether, alleging the company froze $42.4 million in USDt following what they described as an "informal request" from US Homeland Security Investigations. Those funds were connected to a $61 million pig butchering case in the US District Court for the Eastern District of North Carolina, where a seizure warrant for the USDt was issued in February 2025. The pattern has raised questions among crypto industry observers about the extent of Tether's authority to unilaterally freeze customer assets tied to third-party investigations.

Tether has previously stated it cooperates with law enforcement, including announcing earlier this year that it helped freeze $550 million in USDT linked to Iran. The Conduit lawsuit adds to mounting legal scrutiny of how the world's largest stablecoin issuer exercises its power to block wallet access, particularly when actions are taken in response to foreign investigations rather than US court orders.