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Conduit Technology has sued Tether in federal court over $2.76 million in USDT that the stablecoin issuer froze in the company’s treasury wallet and has kept locked since Sept. 24, 2025, according to News.bitcoin. The cross-border payments firm says the freeze was not requested by Brazilian police.
Conduit argues that no external authority asked Tether to act. In the complaint, the company says Tether’s own financial crime unit picked the wallet address using criteria it has not disclosed. Tether had not responded to the allegations as of Oct. 6, 2026.
Also read: Utexo Plans October USDT Launch on Bitcoin via RGB Protocol
Key facts
- Conduit says Tether froze $2.76 million of its USDT on Sept. 24, 2025.
- The wallet was created in May 2025 through Fireblocks to hold working capital; before the freeze it had processed 4,427 transactions involving 78 counterparties and more than $1.1 billion in volume, News.bitcoin reported.
- The complaint says Brazilian authorities investigating Onix Intermediações never identified Conduit’s wallet for freezing, and that police confirmed the address was not among those they flagged.
- Conduit seeks an unfreeze, damages of at least $2.76 million, and disgorgement of income Tether allegedly earned on reserves backing the tokens.
Where the accounts differ
On timing, Cryptobriefing reported the complaint was filed on Oct. 5, 2026, in the Southern District of New York, while Cointelegraph described the filing as taking place on Monday. Cointelegraph also reported that the Brazilian investigation, launched in 2024, covered the financial intermediary Bull Intermediação de Negócios as well as Onix; News.bitcoin and Cryptobriefing named only Onix. Only Cryptobriefing listed the individual defendants, naming Tether Holdings, Tether International, Tether Operations and Tether Investments S.A. de C.V.
A wallet with a trading history
Conduit says the wallet was meant to pre-fund transactions, not to park idle cash. News.bitcoin reported that the address held a modest $33 in TRX and $2.756 million in Tron-based USDT at press time on Oct. 6. The company’s attorneys say Tether repeatedly pointed Conduit toward Brazil’s Federal Police. Conduit counters that its wallet was not part of that probe.
Also read: Circle and Tether Freeze $318K of Bitget Hack Funds
The lawsuit brings six claims, including conversion, unjust enrichment, breach of fiduciary duty and computer fraud, according to News.bitcoin. Conduit’s core assertion in the complaint is that Tether cannot take money from a business simply because that business chose to store it in Tether’s currency.
Conduit says the loss of capital strained its ability to pre-fund deals and eventually forced layoffs and office closures. The case remains at the initial complaint stage, and none of the claims has been tested in court.
Why it matters
USDT holders generally treat the token as a digital dollar, but the issuer can stop specific tokens from moving. Conduit’s suit asks a federal court to define when an issuer may use that power, which would affect every business holding stablecoins as working capital. Cointelegraph reported that the case followed a separate suit about a month earlier, in which two Thai nationals alleged Tether froze $42.4 million in USDT after what they described as an informal request from US Homeland Security Investigations. A court ruling against Tether here could reshape how issuers weigh freeze requests that do not come with a warrant.
What to watch
The next steps are Tether’s formal response and any motion to dismiss, Cryptobriefing reported. How the Southern District of New York handles jurisdiction over the named defendants, several of which are non-US entities, may shape similar disputes. Whether Tether explains the basis for the freeze or ties it to the Brazilian investigation will also matter.
Nothing here is financial advice, and the relevant markets are volatile and uncertain.
Reported by news.bitcoin.com.
Sources: Bitcoin.com News, Cryptobriefing, Cointelegraph