Payments firm Conduit sues Tether over $2.76 million USDT freeze
Cross-border payments firm Conduit has sued Tether in New York federal court, alleging the stablecoin issuer froze $2.76 million in USDT without authorization from Brazilian police, forcing layoffs and office closures.
Conduit Technology filed a complaint on Oct. 5 in the U.S. District Court for the Southern District of New York, accusing stablecoin issuer Tether of unlawfully freezing $2.76 million worth of USDT in its treasury wallet since Sept. 24, 2025. According to the lawsuit, Tether froze the funds without providing an explanation and has refused repeated requests to release them.[3][1][6][4]
Conduit claims Tether initially pointed the company to an ongoing Brazilian Federal Police investigation into Bull Intermediação de Negócios, an affiliate of former Conduit client Onix Intermediações. However, Brazilian authorities and a local criminal court confirmed that Conduit's wallet was never flagged for freezing and that Conduit is not a target of the investigation. Instead, a July 2026 Brazilian police filing cited in the complaint revealed that Tether's T3 Financial Crime Unit used its own undisclosed criteria to select which wallets to freeze from a broader investigative list.[3][6]
Conduit alleged the frozen wallet functioned as its operating bank account to pre-fund client settlements, having moved over $1.1 billion across 4,427 transactions and 78 counterparties in the four months leading up to the freeze without any Onix transactions. Losing access to the working capital reduced transaction volume, forced employee layoffs, and shuttered offices. The company is asserting claims including conversion, breach of fiduciary duty, and computer fraud, while seeking at least $2.76 million in compensatory damages, punitive damages, and disgorgement of profits earned on the backing reserves. Tether has not publicly addressed the lawsuit.[3][6][2]
Key facts
- Conduit Technology filed a lawsuit against Tether on Oct. 5 in the Southern District of New York over $2.76 million in frozen USDT.
- Conduit's wallet has been frozen by Tether since Sept. 24, 2025, with an Aug. 19 demand letter receiving no response.
- Brazilian Federal Police and a Brazilian criminal court confirmed Conduit was not a target of their investigation and that police never requested the wallet freeze.
- A July 2026 Brazilian police filing stated Tether's T3 Financial Crime Unit received suspect addresses and chose which wallets to freeze based on its own criteria.
- The frozen wallet processed over $1.1 billion across 4,427 transactions and 78 counterparties in the four months prior to being locked.
- Conduit alleges the freeze stripped it of working capital, resulting in employee layoffs and office closures.
- Conduit seeks the release of the frozen tokens, at least $2.76 million in compensatory damages, punitive damages, and the disgorgement of profits earned on the backing reserves.
Sources · 6 sources
- TB
The BlockArticle ·
Conduit sues Tether over $2.76 million freeze, says it has ‘no legal entitlement’ to funds Conduit is suing Tether in NY federal court, alleging the USDT issuer froze $2.76 million of its funds for over a year without explanation.
Open source - CB
Coin Bureau@coinbureauPost on X ·
⚡️JUST IN: Tether is being sued over a $2.76 MILLION USDT freeze. Conduit says the funds, used like an operating bank account, have been LOCKED for over a year despite Brazilian authorities not ordering the freeze. It wants the $2.76 MILLION back plus another $2.76 MILLION in damages.
Open source - UN
UnchainedArticle ·
Payments Firm Says Tether Froze $2.76 Million Brazilian Police Didn’t Flag, Forcing Layoffs Tether froze $2.76 million of a payments company’s working capital though the Brazilian police investigation behind the freeze never named its wallet, Conduit Technology alleges in a lawsuit filed in Manhattan federal court. The wallet has been frozen since Sept. 24, 2025 , according to the complaint, filed Oct. 5 in the Southern District of New York. Tether has never released the money or explained the freeze, Conduit says, and pointed the company to Brazilian police when it asked. Get Unchained’s crypto news in your inbox with the free Unchained Daily newsletter . The Brazilian Investigation The freeze came during a Brazilian Federal Police investigation into people and companies tied to Bull Intermediação de Negócios, which the complaint describes as “a financial intermediary that shares common ownership with Onix.” Onix Intermediações last used Conduit’s platform on April 22, 2025, before Conduit opened the wallet in May, the filing says. According to the suit, a July 2026 police filing laid out how the freezes worked: investigators sent a list of suspect addresses to Tether’s T3 Financial Crime Unit , and the unit decided which wallets to freeze using its own criteria. Conduit says its wallet was not on the police list, and that the Brazilian criminal court has recognized Conduit is not a target. “Tether has thus acted on its own initiative to freeze and seize control of Conduit’s funds, based on its own undisclosed criteria,” the complaint says. Layoffs at Conduit Conduit says the wallet held working capital it used to pre-fund client payments, calling it in the complaint “the digital equivalent of the company’s operating bank account.” It says losing the money cut its volume and forced layoffs and office closures. In about four months before the freeze, the wallet moved more than $1.1 billion across 4,427 transactions and 78 counterparties, none involving Onix, according to the complaint . Two Thai businessmen sued Tether in the same court on Aug. 31 over about $42.4 million frozen in October 2025 at what they describe as the “informal request of a U.S. government agent,” months before a seizure warrant was issued. Tether has not publicly addressed Conduit’s suit. CEO Paolo Ardoino said in a Sept. 28 company release on its Iran-related freezes that “Tether can act when credible information is provided by law enforcement.” The release came the same day Sen. Richard Blumenthal asked Treasury and the Justice Department to investigate Tether’s sanctions compliance. Conduit wants the court to order the wallet unfrozen and award at least $2.76 million in damages, the interest Tether has earned on reserves backing the frozen tokens, and punitive damages. An Aug. 19 demand letter drew no reply, it says. Related Listen: Is OpenAI’s Agent Breach a Rogue AI Problem or a Basic Security Failure? The post Payments Firm Says Tether Froze $2.76 Million Brazilian Police Didn’t Flag, Forcing Layoffs appeared first on Unchained .
Open source - Y❤
yourfriendSOMMI ❤️💛💚💙@yourfriendSOMMIPost on X ·
❤️💛💚💙 🚨 JUST IN 🚨 Tether froze $2.76m without any justification, thereby confirming the pDAI prophecy. The world needs a Native Decentralised Stablecoin that is GENISUS act compliant, and OIP (ownerless, immutable, permissionless). https://t.co/SGld36VvLE
Open source - TM
That Martini Guy ₿@MartiniGuyYTPost on X ·
Tether has been sued over its decision to freeze $2.76 million in USDT for more than a year Cross-border payments firm Conduit claims Tether froze its treasury wallet in September 2025 over a Brazilian investigation Conduit says Brazilian police confirmed they never requested its wallet be frozen and did not know why Tether took action The wallet had processed more than $1.1 billion in just four months before the freeze
Open source - PR
ProtosArticle ·
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.” What the Tether audit means for the crypto industry Read more: Tether has publicly listed a company that partially controls USDS 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. Got a tip? Send us an email securely via Protos Leaks . For more informed news and investigations, follow us on X , Bluesky , and Google News , or subscribe to our YouTube channel. The post Conduit sues Tether over $2.8M USDT freeze appeared first on Protos .
Open source