Tether Faces Conduit Lawsuit Over $2.76 Million Freeze and Further Damages Claim

Summary

• Conduit sued Tether in New York seeking release of $2.76 million in USDT allegedly frozen for more than a year.
• Conduit claims Brazilian authorities never requested its wallet freeze and confirmed the company was not under investigation involving customer Onix.
• The lawsuit seeks another $2.76 million in compensation, alleging business harm while Tether earned interest on reserves backing blocked USDT.

Tether faces a lawsuit demanding the release of $2.76 million in USDT, alongside an equivalent claim for additional compensation. According to Conduit’s complaint, the stablecoin issuer froze its treasury wallet and has withheld access for more than a year.

Conduit filed the complaint Monday in the Southern District of New York, alleging Tether has provided no explanation for the freeze. The payment provider also maintains that it owes Tether no money and has no obligation to the issuer.

Its lawsuit seeks recovery of the frozen balance and another $2.76 million in additional damages and profits. Conduit alleges that the restrictions harmed its operations while Tether earned interest on reserves backing the blocked tokens.

The company uses USDT and Circle’s USDC to move money across more than 100 countries through its cross-border payments platform. Its complaint describes the frozen treasury wallet as the equivalent of an operating bank account.

Conduit links the restrictions to an investigation referred to the Brazilian Federal Police involving Onix Intermediações, a former customer. It disputes any connection between that investigation and the money held in its treasury wallet.

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Conduit Cites Brazilian Records to Challenge Tether’s Treasury Wallet Freeze

According to the filing, Onix stopped using Conduit’s platform in April 2025, about a month before the wallet was created. Conduit maintains that the account never held funds belonging to Onix, challenging the alleged connection behind the restrictions.

Additionally, the complaint states that Brazilian law enforcement confirmed it never flagged Conduit’s treasury wallet for freezing. Authorities also indicated that they did not know why Tether had blocked the payment provider’s assets, according to Conduit.

The company further cites a Brazilian court’s confirmation that Conduit was not under investigation in the case involving Onix. Its lawsuit presents those assertions alongside the customer’s departure date to support its request to release the wallet.

Conduit alleges that losing access to operating funds damaged its business throughout the extended period of restrictions. Meanwhile, it claims Tether collected reserve interest despite preventing Conduit from using the corresponding USDT balance.

The additional compensation request covers damages and profits that Conduit attributes to Tether’s handling of the frozen assets. Together, the demands seek the return of company funds and financial recovery beyond the original $2.76 million balance. Conduit is asking the New York court to order Tether to release the USDT and award the additional compensation sought.

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