Payments company Conduit Technology has sued Tether over $2.76 million in USDT that the issuer froze in September 2025 without explanation. According to Cointelegraph, the complaint was filed in the US District Court for the Southern District of New York on Monday, October 5.
The money has been locked for more than 12 months. Conduit says the funds are its own, that Tether has "no legal entitlement" to them, and that the freeze did real damage to its business.
What was frozen and when
Conduit began holding USDT in a treasury wallet in May 2025. On September 24, according to the plaintiff, Tether blocked the entire balance, all $2.76 million. Only four months passed between the first deposit and the freeze.
From the freeze to the lawsuit, 376 days went by. Conduit says it asked repeatedly for the funds to be released, but as of Monday that had not happened. Cointelegraph asked Tether for comment and did not get a quick reply.
The Brazilian trail: why the wallet drew suspicion
The complaint ties the freeze to a Brazilian federal police investigation opened in 2024 into the financial intermediary Bull Intermediação de Negócios and the company Onix. Tether, Conduit claims, flagged its wallet as linked to those firms "on its own initiative using its own criteria". So in the plaintiff's version, Tether made the call itself.
"Tether is not allowed to take money from businesses just because they chose to store that money in Tether's currency."
- from Conduit's complaint in the US District Court for the Southern District of New York, October 5, 2026
A second lawsuit in a month, and the amounts differ 15-fold
About a month earlier, two Thai nationals sued Tether over $42.4 million in frozen USDT. They say the block came after an "informal request" from US Homeland Security Investigations. The funds are linked to a $61 million pig butchering fraud case in the US District Court for the Eastern District of North Carolina, which issued a seizure warrant for the USDT in February.
The sums differ: $42.4 million against $2.76 million, roughly a 15-fold gap. The pattern is the same, since Tether blocks and the owner goes to court for answers. The grounds differ, though. The Thai case involves a seizure warrant, while Conduit, by its own account, suffered from the issuer's own decision.
Why this matters beyond $2.76 million
For a payments company that holds USDT as a treasury reserve, a frozen wallet means lost working liquidity, not a line in a report. An issuer can freeze addresses at the request of law enforcement, and that capability itself becomes counterparty risk.
At Kurslog we advise anyone planning to sell USDT for hryvnia not to keep large sums on one address for long and to split them across several wallets. It does not settle who is right in court. It is plain hygiene.
Risks for Tether and stablecoin holders
- A template for other suits. Two filings in a month create an example that owners of other frozen addresses could follow.
- The court has not yet heard the case on the merits, and Tether's position is unknown.
- Payments companies will have to decide how much USDT reserve is safe to keep on a single address.
What is known today
What we know is $2.76 million, 376 days of freeze and a second lawsuit against Tether in under a month, this time for $42.4 million. Yet every detail still rests on Conduit's claims alone, and Tether is silent. The first procedural steps will show whether the issuer tries to dismiss the case or agrees to explain its freezing criteria.
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