TLDR
- Conduit Technology initiated legal proceedings against Tether in New York federal court this week.
- The payments firm alleges Tether locked $2.76 million worth of USDT in September 2025 without providing justification.
- The frozen assets are connected to a Brazilian criminal inquiry involving Onix Intermediações, a past client of Conduit.
- Conduit maintains that Brazilian authorities verified its wallet was never targeted and the company faces no charges.
- The legal action demands restoration of the frozen assets along with $2.76 million in compensatory damages.
Cross-border payments provider Conduit Technology has taken legal action against Tether, the stablecoin issuer, in a lawsuit alleging the improper freezing of $2.76 million in USDT holdings without adequate explanation.
The legal complaint was submitted to the US District Court for the Southern District of New York this Monday. According to Conduit, the company has been unable to access these funds for over twelve months.
Conduit operates as a global payments infrastructure provider, leveraging stablecoins such as USDT and Circle’s USDC to facilitate financial transfers spanning more than 100 nations worldwide.
According to the filing, the frozen digital wallet served as Conduit’s primary operational treasury account. The loss of access has significantly disrupted the company’s day-to-day business activities.
Core Allegations in the Filing
The complaint states that Conduit began maintaining USDT reserves in a digital treasury wallet from May 2025 onward. Tether subsequently froze the entire $2.76 million balance in that wallet on September 24, 2025.
The court documents assert that Conduit has “no legal entitlement” and “no claim” associated with any illicit activity. The company maintains that Tether has failed to provide a coherent justification for the freeze.
“Conduit owes no money to Tether and has no obligation to Tether,” the legal filing declares. The company states it has made numerous attempts to secure release of the funds, all unsuccessful.
The frozen funds are tied to a 2024 criminal investigation conducted by Brazil’s federal police. That inquiry centered on Bull Intermediação de Negócios and another entity called Onix Intermediações.
According to Conduit, Onix had previously been a client but ceased utilizing the platform in April 2025—roughly one month before the disputed treasury wallet was even established.
Court documents indicate that Brazilian law enforcement authorities verified that Conduit’s wallet was never designated for freezing. Additionally, a Brazilian court reportedly confirmed that Conduit is not a subject of investigation in the Onix matter.
Conduit contends that Tether implemented the freeze “on its own initiative using its own criteria.” The company asserts this action was taken without any formal legal directive specifically targeting Conduit.
Similar Cases Emerge Against Tether
This legal action represents the second recent lawsuit involving frozen Tether holdings. Approximately one month prior, two individuals from Thailand filed separate litigation against Tether over frozen assets.
In that previous case, Tether reportedly froze $42.4 million in USDT. The freeze followed what the plaintiffs characterized as an unofficial request from US Homeland Security Investigations.
That particular freeze related to a $61 million pig butchering fraud case initiated in the Eastern District of North Carolina. A seizure warrant for those funds was granted in February.
While Conduit’s lawsuit does not explicitly mention that prior case, both legal actions present comparable allegations regarding Tether freezing customer assets without transparent legal authorization.
In its court filing, Conduit alleges that Tether continues generating interest revenue on the reserves underlying the frozen stablecoins. The company contends this arrangement allows Tether to profit while Conduit’s capital remains inaccessible.
The lawsuit requests the court mandate Tether to unlock the $2.76 million in frozen USDT. Additionally, it seeks $2.76 million in compensatory damages and any profits Tether purportedly gained during the freeze period.
Cointelegraph contacted Tether seeking commentary on the litigation. As of Monday, Tether had not released any public statement regarding the matter.
The case is now pending before the Southern District of New York. A hearing schedule has not yet been announced.
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