Conduit Technology, a company specializing in cross-border payments, has filed a lawsuit against stablecoin issuer Tether in the US District Court for the Southern District of New York. Conduit alleges that Tether froze $2.76 million worth of USDT held in the firm’s digital treasury wallet in September 2025 without providing any justification or explanation.
Details of Conduit’s Claims
In its legal complaint, Conduit stated that it began holding USDT in its treasury in May 2025 as part of regular business operations. The filing claims that Tether suddenly blocked Conduit’s access to all $2.76 million of these funds, which Conduit asserts were rightfully theirs and to which Tether “had no legal entitlement.”
Conduit further argued that the freeze occurred without warning and directly impacted the company’s operations, depriving it of assets crucial to its business activities.
“The funds are unequivocally Conduit’s, but Tether has taken them and is denying Conduit access to them. Tether is not allowed to take money from businesses just because they chose to store that money in Tether’s currency,” the lawsuit alleges.
Connection to Brazilian Investigation
According to court documents, Tether identified Conduit’s wallet as being associated with Bull Intermediação de Negócios and Onix, both of which have been under investigation by Brazilian federal police since 2024. The suit claims Tether acted independently, using its own internally developed criteria when it decided to freeze the balance on September 24, 2025.
Conduit has argued that it does not have any links warranting the freeze and claims all requests to unfreeze the funds have been ignored by Tether.
Mini dictionary: Bull Intermediação de Negócios and Onix are Brazilian financial intermediaries that reportedly became the focus of a federal police investigation into alleged irregular financial activities. Law enforcement scrutiny of such firms often leads to assets being frozen in relation to ongoing probes.
As of the date of the lawsuit, Conduit reported that it had not regained access to its USDT and that Tether had not responded to repeated requests for an explanation or the release of funds.
Similar Cases and Tether’s Other Freezes
The legal action against Tether follows a similar incident the previous month, when two Thai nationals complained that Tether froze $42.4 million in USDT. The action in that case reportedly came after an “informal request” by US Homeland Security Investigations, and was related to a $61 million pig butchering scam that led to a federal seizure warrant in North Carolina earlier in the year.
Earlier this year, Tether stated it had cooperated with authorities in freezing $550 million in USDT linked to Iranian networks, showing an ongoing pattern of the stablecoin issuer engaging with global investigations.
| Case | Amount Frozen | Reason Alleged | Jurisdiction |
|---|---|---|---|
| Conduit Technology | $2.76 million | Tied to Brazilian investigation | Southern District of New York |
| Thai nationals | $42.4 million | Tied to US pig butchering scam | Eastern District of North Carolina |
| Iran-linked accounts | $550 million | Linked to Iranian networks | Global |
Conduit claims Tether’s actions “materially impacted its business” and insists that no clear explanation for the asset freeze has been provided, despite repeated inquiries.
Tether, a company known for issuing one of the world’s largest stablecoins, has not released a public statement in response to Conduit Technology’s allegations as of the filing date.
