TLDR
- Conduit Technology initiated legal proceedings against Tether in New York federal court this Monday.
- The payments firm alleges Tether locked $2.76 million worth of its USDT holdings in September 2025 without providing justification.
- The asset freeze connects to a Brazilian law enforcement inquiry involving Onix IntermediaƧƵes, previously a Conduit client.
- Conduit asserts Brazilian authorities verified its wallet faced no restrictions and the company was not part of any investigation.
- The legal filing seeks recovery of the frozen assets along with an equal amount in compensatory damages.
Cross-border payments company Conduit Technology has initiated a lawsuit against Tether, the issuer of the world’s largest stablecoin. The firm alleges that Tether locked away $2.76 million of its USDT holdings without adequate explanation.
The legal complaint was lodged with 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 payment infrastructure provider specializing in international transfers. The platform leverages stablecoins such as USDT and Circle’s USDC to facilitate financial transactions spanning over 100 nations.
According to the complaint, the frozen digital wallet functioned as Conduit’s primary treasury account. The inability to access these funds has significantly disrupted the company’s day-to-day business activities, the filing indicates.
Core Allegations in the Legal Filing
According to Conduit’s account, the company started maintaining USDT reserves in a digital treasury wallet beginning in May 2025. Tether proceeded to freeze the entire $2.76 million balance in that wallet on September 24, 2025.
The legal document asserts that Conduit has “no legal entitlement” and “no claim” connected to any alleged misconduct. The firm maintains that Tether has failed to provide a substantive justification for blocking the funds.
“Conduit owes no money to Tether and has no obligation to Tether,” the legal filing declares. The company states it has made numerous requests for Tether to unfreeze the assets, all of which have been unsuccessful.
The asset freeze appears connected to a 2024 criminal investigation conducted by Brazil’s federal police. That inquiry centered on a financial services entity called Bull IntermediaĆ§Ć£o de NegĆ³cios along with another firm, Onix IntermediaƧƵes.
Conduit emphasizes that Onix had been a customer previously but ceased utilizing the Conduit platform in April 2025. Notably, this occurred roughly one month before the treasury wallet at the center of the dispute was established.
The complaint asserts that Brazilian law enforcement officials verified that Conduit’s wallet was never designated for asset freezing. Additionally, the filing states that a Brazilian judicial authority confirmed Conduit was not a subject in the Onix investigation.
Conduit contends that Tether froze the wallet “on its own initiative using its own criteria.” According to the company, this action was taken in the absence of any formal legal directive specifically naming Conduit.
Multiple Tether Freeze Cases Emerge
This lawsuit represents the latest in a series of legal challenges involving Tether’s asset freezing practices. Approximately one month prior, two individuals from Thailand filed a separate lawsuit against the stablecoin issuer.
In that instance, Tether purportedly froze $42.4 million in USDT holdings. The freeze came after what the plaintiffs described as an unofficial communication from US Homeland Security Investigations.
That particular freeze related to a $61 million cryptocurrency romance scam prosecution filed in North Carolina’s Eastern District. A court-authorized seizure warrant for those funds was granted in February.
While Conduit’s legal action does not explicitly mention that earlier case, both complaints present comparable arguments regarding Tether freezing customer assets without definitive legal authorization.
In its complaint, Conduit points out that Tether continues to generate returns on the reserve assets that back the frozen stablecoins. The company contends this arrangement allows Tether to benefit financially while Conduit’s capital remains inaccessible.
The lawsuit requests the court to compel Tether to restore access to the $2.76 million in frozen USDT. Conduit also seeks an additional $2.76 million representing damages and alleged profits Tether has earned.
Cointelegraph contacted Tether requesting comment regarding the litigation. As of Monday, Tether had not released any official statement addressing the case.
The matter is now under consideration in the Southern District of New York. The court has not yet scheduled a hearing date.
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