- Conduit Technology sued Tether, alleging it unlawfully froze about $2.76 million in USDT on September 24, 2025.
- Conduit says the freeze deprived it of working capital, forcing it to reduce client settlements, lay off employees and close offices.
- The company denies that the affected wallet was connected to the Brazilian police investigation that preceded the freeze.
Conduit Technology filed a lawsuit against Tether in federal court for the Southern District of New York, alleging that Tether froze about $2.76 million in USDT without legal grounds on September 24, 2025. Conduit says the assets were its working capital and that losing access to them damaged its business.
According to Conduit, the funds were held in a separate Fireblocks wallet that it created on May 20, 2025. Before the freeze, the wallet processed more than 4,400 transactions totaling over $1.1 billion, the company said.
Conduit disputes link to Brazilian investigation
The freeze occurred amid an investigation by Brazil’s Federal Police into the company BULL and its related entity Onix, which had previously used Conduit’s platform.
Conduit alleges that Onix stopped using the platform on April 22, 2025, almost a month before the disputed wallet was created. The company also says no transaction from that wallet was connected to Onix or any affiliated entity.
According to Conduit, Brazilian police provided the T3 Financial Crime Unit with a list of suspicious addresses, after which Tether independently identified additional wallets to block. Conduit believes its address was added to the list through that process.
The company says it repeatedly contacted Tether during 2026 to demand that the assets be unfrozen. On August 19, Conduit’s lawyers sent a formal demand seeking the release of the funds within five business days, but the company alleges that Tether did not respond.
Conduit seeks return of USDT and damages
Conduit says the loss of access to its working capital forced it to reduce the volume of client settlements and caused it to lose part of its business. It also says it had to lay off employees and close offices.
The lawsuit seeks the return of $2.76 million in USDT, at least $2.76 million in damages and compensation for additional losses. Conduit is also seeking information about Tether’s income from the reserves backing the frozen tokens.
The allegations represent Conduit’s position in the litigation. The court has not determined that the freeze was unlawful or that the company’s other claims are supported by the facts.
The case comes after an earlier report that the United States froze accounts belonging to a payment company linked to Tether and Bitfinex.
Source: Incrypted
