Conduit sues Tether over $2.76M in frozen USDT

6.7 Regulation

Oct 6, 2026

Conduit sued Tether, alleging $2.76M in USDT was frozen without cause, harming its business, while Tether earned interest on the reserves.

Conduit Technology, Inc., a cross-border payments company, has filed a lawsuit against Tether in the U.S. District Court for the Southern District of New York. The suit alleges that Tether froze approximately $2.76 million of Conduit's USDT holdings in September 2023 without prior notice, justification, or legal authority. Conduit claims the freeze, which has lasted over a year, was linked to a Brazilian Federal Police investigation into a third party, Onix. However, Conduit asserts its treasury wallet was created after Onix's last transaction, never held Onix's funds, and was flagged by Tether's compliance team, not by law enforcement. Both Brazilian police and courts reportedly confirmed that Conduit's wallet was not under investigation or subject to a freeze order. The company alleges Tether acted independently and failed to provide substantive responses to requests for unfreezing the funds. As a result, Conduit suffered layoffs and office closures, while Tether continued to earn interest on the reserves backing the frozen USDT. The lawsuit alleges conversion, unjust enrichment, breach of fiduciary duty, and computer fraud, seeking the return of the frozen funds.