- Cross-border payments firm Conduit is suing Tether, alleging the USDT issuer froze $2.76 million in company funds more than a year ago without providing an explanation.
- Conduit says Brazilian authorities confirmed its treasury wallet was never flagged for freezing and that the company was not under investigation in the case linked to a former customer.
- The lawsuit seeks the release of the $2.76 million in USDT plus another $2.76 million in damages and profits Conduit alleges Tether earned from reserves backing the frozen tokens.
Cross-border payments company Conduit has filed a lawsuit against Tether over $2.76 million in USDT that it says has remained frozen for more than a year.
The complaint was filed Monday in the Southern District of New York.
Conduit alleges Tether has refused to release the funds or provide an explanation for why its treasury wallet was frozen.
“Conduit owes no money to Tether and has no obligation to Tether,” the complaint states.
Conduit uses stablecoins including USDT and Circle’s USDC to facilitate payments across more than 100 countries. The company described the affected wallet as the equivalent of its operating bank account.
Freeze Allegedly Linked to Brazilian Investigation
According to the complaint, the freeze appears to be connected to an investigation involving Onix Intermediações, a former Conduit customer, that was sent to the Brazilian Federal Police.
However, Conduit claims Brazilian law enforcement confirmed that its treasury wallet was never flagged for freezing.
The company also says authorities do not know why Tether took action against the wallet.
Conduit further alleges that a Brazilian court confirmed the payments company was not under investigation in the case involving Onix.
Conduit Says Wallet Never Held Onix Funds
Conduit says Onix stopped using its platform in April 2025, approximately one month before the affected treasury wallet was created.
According to the lawsuit, the wallet therefore never held funds belonging to Onix.
Conduit argues that the continued freeze has negatively affected its business because the wallet was used to support company operations.
Meanwhile, the lawsuit alleges that Tether continues to earn interest on reserves backing the frozen USDT.
Conduit Seeks $5.52 Million From Tether
Conduit is asking the court to require Tether to release the $2.76 million in frozen USDT.
The company is also seeking an additional $2.76 million in damages and profits that it alleges Tether earned from reserves backing the blocked tokens.
That brings the total amount sought to approximately $5.52 million.
The allegations remain claims made by Conduit in its lawsuit, and the filing does not establish that Tether acted improperly.
