Cross-border payments firm Conduit sues Tether, alleging unjustified freeze of $2.76 million in USDT

PANews reported on October 7, citing Decrypt, that cross-border payments company Conduit has sued stablecoin issuer Tether in the U.S. District Court for the Southern District of New York. Conduit alleges that Tether unilaterally froze $2.76 million worth of USDT in its treasury wallet on September 24, 2025, and has refused to unfreeze it for more than a year.

According to the complaint, the freeze stemmed from an investigation by Brazilian police into a third party, Onix. However, Conduit claims the wallet in question was created after Onix's last transaction, never held Onix funds, and was not flagged by Brazilian police; the freeze decision was made independently by Tether's T3 Financial Crime Unit.

Conduit said the wallet freeze caused a severe liquidity crisis, forcing the company to lay off staff and close its offices; meanwhile, Tether has continued to earn interest on the reserve U.S. Treasury bonds corresponding to these funds. The lawsuit seeks remedies including conversion, unjust enrichment, breach of fiduciary duty, and computer fraud, and demands the return of the funds.

Recently, Tether has been repeatedly embroiled in lawsuits over its on-chain freeze authority. Earlier this year, two Thai businessmen sued Tether for freezing $42.4 million in USDT. This case has once again sparked market controversy over Tether's power to unilaterally freeze USDT addresses.