Crypto firm Conduit takes Tether to court over frozen USDT

Tether has been accused in a lawsuit by crypto payments firm Conduit of unlawfully freezing USDT worth $2.76 million and refusing to return it for more than a year.

Conduit brought the case in New York yesterday. It says Tether froze the funds in September 2025 and repeatedly pointed Conduit to a Brazilian Federal Police contact with “no context” for the referral.

Conduit claims Tether never responded “substantively” to its requests to unfreeze the money, and that the firm eventually turned to the Brazilian police for help.

According to Conduit, the police confirmed they “did not identify Conduit’s wallet for freezing,” and they also do not know “what evaluation criteria (if any) led Tether to freeze the funds.”

USDT freeze tied to Brazilian police inquiry

The complaint states that the police did ask Tether to freeze a series of wallets linked to “Onix Intermediações Ltda,” which had used Conduit’s platform.

Common ownership links Onix to “Bull Intermediação de Negócios Ltda,” a company that was under police investigation.

Conduit, however, says neither Onix nor its funds have interacted with the treasury wallet, and that its “treasury wallet did not even exist when Onix was using Conduit’s platform.”

Consequently, 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, Conduit says, is hindering its ability to pre-fund and settle client transactions and has led it to fire employees and shut offices.

Conduit’s claims are 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.

In its requested relief, the firm wants the funds unfrozen, compensatory damages of at least $2.76 million, punitive damages, and restitution and disgorgement covering all interest, income, and profit Tether made.