Crypto payments firm Conduit has filed a lawsuit in New York accusing Tether of unlawfully freezing $2.76 million worth of USDT and refusing to return the funds for more than a year.
The complaint says Tether froze the funds in September 2025. Conduit alleges that Tether repeatedly referred the company to a contact at the Brazilian Federal Police, but gave “no context” for that referral. It also says Tether did not “substantively” respond to requests to unfreeze the assets, prompting Conduit to seek help from Brazilian police.
Conduit says police did not identify its wallet for freezing
According to the lawsuit, Brazilian police told Conduit that they “did not identify Conduit’s wallet for freezing,” and that they also do not know “what evaluation criteria (if any) led Tether to freeze the funds.”
The filing says police did ask Tether to freeze a series of wallets linked to Onix Intermediações Ltda, which had used Conduit’s platform. Onix shares common ownership with Bull Intermediação de Negócios Ltda, a company that was under police investigation.
Conduit argues that Onix, or Onix’s funds, never interacted with the treasury wallet in question. It also says its “treasury wallet did not even exist when Onix was using Conduit’s platform.” On that basis, the company claims Tether froze and seized control of its funds on its own initiative, using undisclosed internal criteria.
Freeze allegedly disrupted operations
Conduit says the frozen USDT has hindered its ability to pre-fund and settle client transactions. The company also claims the situation has led to employee layoffs and office closures.
In the suit, Conduit brings claims for 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.
What Conduit is asking the court to award
As relief, Conduit is seeking to have the funds unfrozen, recover compensatory damages of no less than $2.76 million, obtain punitive damages, and secure restitution and disgorgement of all interest, income, and profit that Tether may have made from the assets since the freeze.
Protos reported that the lawsuit was filed in New York yesterday.