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      Conduit Technology Sues Tether Over $2.76 Million in Frozen USDT

      Conduit Technology, Inc., a cross-border payments firm, has filed a lawsuit against Tether in the US District Court for the Southern District of New York, alleging that the stablecoin issuer unlawfully froze approximately $2.76 million of its USDT without prior notice or legal justification. The complaint was submitted on October 5, 2026, following an incident in September 2025 when Conduit claims it lost access to its funds due to actions taken by Tether's T3 Financial Crime Unit.

      The lawsuit names several Tether entities, including Tether Holdings, Tether International, Tether Operations, and Tether Investments S.A. de C.V. Conduit asserts that the freeze was not warranted, as it was not involved in any compliance issues or investigations, specifically referencing a Brazilian Federal Police inquiry that it claims does not pertain to its operations. Conduit began holding the USDT as working capital in May 2025, and it argues that its digital treasury wallet was not flagged in connection with the investigation.

      In its legal action, Conduit seeks a declaratory judgment affirming that Tether lacks the authority to freeze its assets, an immediate court order to unfreeze the wallet, and compensatory damages of at least $2.76 million. The company is also pursuing potential consequential damages and any profits generated from the reserves backing the frozen tokens. As of October 6, 2026, Tether had not publicly responded to the allegations, and the case remains in the initial complaint stage.

      © 2026 KLEA News. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

      Source: KLEA News

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