Conduit Technology, a cross-border payment services provider, has initiated legal proceedings against Tether in the Federal Court of the Southern District of New York. The lawsuit claims that Tether froze $2.76 million in USDT from Conduit’s digital treasury wallet in September 2025, without offering any justification, thereby blocking the company’s access to its assets.
Core Allegation in the Lawsuit
According to the court documents, Conduit began holding USDT in its digital treasury from May 2025. The firm asserts that as of September 24, 2025, its entire $2.76 million holdings in USDT were frozen. Conduit contends that Tether had no legal claim or right over these assets, and this move has significantly disrupted its operations.
Conduit argued in the lawsuit that the frozen assets were clearly the company’s property, and by preventing access to them, Tether was effectively withholding its funds.
An established financial technology company focused on cross-border payments, Conduit alleges that Tether made the decision to freeze the assets based on its own criteria, linking Conduit’s treasury wallet to certain third parties.
Emerging Links to Brazil
The freeze, as Conduit narrates, was connected to an ongoing investigation initiated in 2024 by Brazil’s federal police involving Bull Intermediação de Negócios and Onix. Conduit claims that Tether, of its initiative, associated the company’s treasury wallet with these entities and subsequently froze $2.76 million on September 24, 2025.
Conduit reported having repeatedly sought the release of the frozen funds from Tether, but as of Monday, no resolution had been reached. Tether did not immediately provide a statement regarding the litigation.
Conduit maintains that simply because companies held their funds in Tether’s issued digital asset does not justify the seizure of said funds.
Similar Legal Challenge Arises
This lawsuit follows a previous case filed against Tether by two Thai nationals about a month prior. In that case, the plaintiffs alleged that $42.4 million in USDT was frozen following an unofficial request purportedly from U.S. Homeland Security Investigations.
The assets in question from that case were linked to a $61 million fraud investigation handled by the Federal Court of the Eastern District of North Carolina, which issued a seizure order for the USDT in February.
Earlier this year, Tether also expressed its support for the freeze of $550 million in USDT tied to Iranian connections. These developments have once again brought to light the contentious subject of stablecoin issuers’ asset freezing authority and the criteria governing such actions.
