Conduit sues Tether over $2.8M USDT freeze

A lawsuit filed by crypto payments firm Conduit has accused Tether of unlawfully freezing $2.76 million worth of its USDT and refusing to give it back for over a year.

Conduit filed the lawsuit in New York yesterday. It claims that Tether froze the funds in September 2025 and repeatedly referred Conduit to a contact in the Brazilian Federal Police with “no context” for said referral.

The firm says Tether didn’t “substantively” respond to its requests to unfreeze the funds and eventually sought help from Brazilian police.

According to Conduit, police confirmed that they “did not identify Conduit’s wallet for freezing,” and that they also don’t know “what evaluation criteria (if any) led Tether to freeze the funds.”

Frozen USDT linked to Brazilian police investigation

The lawsuit notes that police did ask Tether to freeze a series of wallets linked to “Onix Intermediações Ltda” which had used Conduit’s platform.

Onix shares common ownership with “Bull Intermediação de Negócios Ltda,” which was under investigation by the police.

However, Conduit says Onix, or Onix’s funds, haven’t interacted with the treasury wallet, and that its “treasury wallet did not even exist when Onix was using Conduit’s platform.”

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As such, Conduit says Tether “acted on its own initiative to freeze and seize control of Conduit’s funds, based on its own undisclosed criteria.”

The freeze is allegedly hindering Conduit’s ability to pre-fund and settle client transactions, and has resulted in the firm firing employees and closing offices.

Conduit is claiming conversion, unjust enrichment, breach of fiduciary duty, computer fraud, a declaratory judgment in its favor, and an accounting of the reserves and any interest, profits, or income Tether may have made from the funds since the freeze.

As relief, it wants the funds unfrozen, compensatory damages no less than $2.76 million, punitive damages, and restitution and disgorgement of all interest, income, and profit made by Tether.

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