TheBlock
Cross-border payments firm Conduit is suing Tether in the Southern District of New York, alleging the USDT issuer froze $2.76 million in its funds and has refused to release them or explain why. Conduit says the funds have been inaccessible for more than a year and that the wallet served as the equivalent of its operating bank account. It seeks release of the funds plus another $2.76 million in damages and profits.
Why it matters
Conduit says the freeze was linked to an investigation sent to Brazil's Federal Police involving former customer Onix Intermediações. But the complaint says law enforcement did not flag Conduit's treasury wallet for freezing, and a Brazilian court confirmed Conduit was not under investigation in the Onix case.
The firm also says Onix stopped using its platform in April 2025, about a month before the wallet was created, and that the wallet never held Onix funds. Those claims are allegations in the lawsuit, not findings by a court.
Market impact
Conduit uses USDT and USDC to move money across more than 100 countries. The case highlights how an issuer's decision to freeze stablecoins can affect a payments firm's access to operational funds, even when the firm says it was not the target of the underlying investigation.
Conduit alleges Tether continues to collect interest on reserves backing the blocked USDT. The suit asks the court to order the release of $2.76 million and award an additional $2.76 million in damages and profits.
Frequently asked questions
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How much USDT does Conduit say Tether froze?
Conduit alleges Tether froze $2.76 million in USDT and has refused to release it or explain the freeze.
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What is Conduit asking the court to award?
Conduit seeks release of the $2.76 million and an additional $2.76 million in damages and profits.
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What does Conduit say the frozen wallet was used for?
The firm says the wallet supported its operations and was equivalent to its operating bank account.
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How does the lawsuit link the freeze to Brazil?
Conduit says the freeze was connected to an investigation involving former customer Onix Intermediações, but alleges authorities did not flag its treasury wallet.
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Which stablecoins does Conduit use for cross-border payments?
Conduit says it uses Tether's USDT and Circle's USDC to move money across more than 100 countries.
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