BTC $85,614 
ETH $2,692 
USDT $0.9999 
BNB $778.74 
XRP $1.50 
USDC $0.9999 
SOL $120.83 
TRX $0.3358 
FIGR_HELOC $1.04 
ZEC $1,346 Conduit sues Tether over $2.76 million USDT freeze in New York
Conduit says Tether froze $2.76 million of its USDT in September 2025 and has kept the funds locked since, prompting a New York lawsuit.
Key takeaways
- **$2.76 million.**. Conduit says Tether froze that amount of its USDT and has kept the funds since Sept. 24, 2025.
- **More than $1.1 billion.**. Conduit says its treasury wallet handled that much volume across roughly four months before the freeze.
- **No less than $2.76 million.**. That is the floor for the compensatory damages Conduit seeks, alongside punitive damages.
What happened
Conduit, a cross-border payments company, has sued Tether, saying the stablecoin issuer froze $2.76 million of its USDT and would not give it back for more than a year. The complaint was filed in New York.
The filing, made in the U.S. District Court for the Southern District of New York, says Tether froze Conduit's treasury wallet on Sept. 24, 2025 and has kept the funds locked since, while earning interest on the U.S. Treasury securities that back the frozen tokens.
The suit brings claims including conversion, computer fraud, unjust enrichment and breach of fiduciary duty, and it asks for the return of the funds. Conduit also seeks a declaratory judgment in its favor and an accounting of the reserves and any interest, profits or income Tether made from the funds. Conduit wants the funds unfrozen and seeks compensatory damages of no less than $2.76 million plus punitive damages.
Why it matters
The case puts more attention on Tether's power to freeze USDT on its own authority. Conduit says Tether's T3 Financial Crime Unit made the freeze call independently and used criteria it has not disclosed.
Conduit says the freeze has hindered its ability to pre-fund and settle client transactions. It says the company has laid off staff and closed offices, and that its wallet had processed more than $1.1 billion in volume across roughly four months before it was locked.
Tether also faces criticism from the other direction. Sen. Richard Blumenthal has called USDT a 'superhighway' for sanctions evasion, pointing to Iran's use of the coin.
What the data shows
$2.76 million: the amount Conduit says was frozen, and the floor for the compensatory damages it seeks.
More than $1.1 billion: the volume Conduit says its treasury wallet processed in roughly four months before the freeze.
Background
The freeze traces back to a Brazilian investigation. According to the filing, Brazil's Federal Police were looking into entities linked to a firm called Onix, a company that had used Conduit's platform at one point.
Conduit says its frozen wallet was created in May 2025 and never held any Onix funds, and that the wallet came after the last Onix transaction on the platform.
What is still unclear
- Conduit says Brazilian police confirmed they never asked for its wallet to be frozen, and that officers did not know the criteria behind Tether's freeze.
- Conduit says Tether froze the funds on its own initiative, based on criteria it has not disclosed.
Questions readers ask
Why is Conduit suing Tether?
Conduit says Tether froze $2.76 million of its USDT in September 2025 and refused to release the funds for more than a year. The company says the freeze has hurt its business and led it to lay off employees and close offices.
When did Tether freeze Conduit's funds?
Conduit says the freeze began on Sept. 24, 2025, when Tether locked its treasury wallet. The complaint was filed in the U.S. District Court for the Southern District of New York.
What is Conduit asking the court for?
Conduit wants the funds unfrozen, compensatory damages of no less than $2.76 million, and punitive damages. It also seeks restitution and disgorgement of interest, income and profit Tether made from the funds.
What does the Brazilian police investigation have to do with the wallet?
Conduit says Brazil's Federal Police were probing entities tied to Onix, a firm that had used its platform, but that police never flagged Conduit's wallet for freezing. Conduit says the wallet was created in May 2025 and never held Onix funds.
