Cross-border payments firm Conduit has sued Tether in the U.S. District Court for the Southern District of New York, alleging that the stablecoin issuer froze $2.76 million of its funds and then refused to unfreeze the assets or explain the decision. Conduit said the USDT had been locked for more than a year. In the complaint, the company argued that it owed Tether nothing and had no obligations to it.
The filing says Conduit uses stablecoins including Tether’s USDT and Circle’s USDC to move funds across more than 100 countries, and that the frozen wallet functioned as the company’s “operational bank account.” The lawsuit says the freeze was allegedly tied to an investigation received by Brazil’s federal police involving former Conduit client Onix Intermediações. Conduit, however, said law enforcement confirmed it never asked for the payment firm’s wallet to be frozen, and that a Brazilian court also confirmed Conduit was not under investigation in connection with the Onix matter.
According to the complaint, Onix stopped using Conduit’s platform in April 2025, about one month before the wallet was created, and the wallet never held any Onix funds. Conduit said the freeze has affected its business, while Tether continues to earn interest on reserves backing the frozen USDT.
Cross-border payments company Conduit has filed a lawsuit against stablecoin issuer Tether in the U.S. District Court for the Southern District of New York, alleging that Tether froze $2.76 million of its funds and refused to unfreeze the assets or provide any explanation.
Conduit said its USDT has been locked for more than a year. The complaint states: “Conduit does not owe Tether any money and has no obligations to Tether.”
Complaint says frozen wallet served as an operating account
According to the filing, Conduit uses stablecoins including Tether’s USDT and Circle’s USDC to transfer funds across more than 100 countries. The lawsuit says the wallet frozen by Tether was effectively Conduit’s “operational bank account.”
Freeze allegedly linked to Brazil investigation involving former client
The complaint says the freeze was allegedly triggered by an investigation received by Brazil’s federal police involving Conduit’s former client, Onix Intermediações.
Conduit said law enforcement authorities confirmed they never requested a freeze on the payment company’s wallet, and that the company does not know why Tether took the action. A Brazilian court also confirmed that Conduit was not under investigation in connection with the Onix Intermediações case.
Filing details timing of Onix’s departure from the platform
According to the complaint, Onix had not used Conduit’s platform since April 2025, roughly one month before the wallet was created, and the wallet never held any funds belonging to Onix.
Conduit said the wallet was used to support company operations and that the freeze has affected its business. The lawsuit also says Tether continues to earn interest on the reserves backing the frozen USDT.
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