Conduit Technology has accused Tether of freezing $2.76 million in the payments company’s working capital even though the Brazilian police investigation behind the action never named Conduit’s wallet, according to a lawsuit filed in federal court in Manhattan.
The complaint, filed Oct. 5 in the U.S. District Court for the Southern District of New York, says the wallet has been frozen since Sept. 24, 2025. Conduit said Tether has never released the money or explained the freeze, and directed the company to Brazilian police when it asked about the action.
The Brazilian investigation cited in the complaint
The freeze took place during a Brazilian Federal Police investigation into people and companies tied to Bull Intermediação de Negócios, which the complaint describes as a financial intermediary that shares common ownership with Onix.
According to the filing, Onix Intermediações last used Conduit’s platform on April 22, 2025. Conduit opened the wallet in May 2025, after that activity had ended.
Conduit said a July 2026 police filing described how the freezes worked. Investigators sent a list of suspect addresses to Tether’s T3 Financial Crime Unit, and that unit decided which wallets to freeze using its own criteria. Conduit argued that its wallet was not on the police list, and that a Brazilian criminal court has recognized the company is not a target of the case.
The complaint states that “Tether has thus acted on its own initiative to freeze and seize control of Conduit’s funds, based on its own undisclosed criteria.”
Company says the freeze cut volume and led to layoffs
Conduit said the wallet held working capital used to pre-fund client payments, calling it “the digital equivalent of the company’s operating bank account” in the complaint.
The company said losing access to the funds reduced its transaction volume and forced layoffs and office closures.
In roughly four months before the freeze, the wallet moved more than $1.1 billion across 4,427 transactions and 78 counterparties, with none of those transfers involving Onix, according to the complaint.
Another Tether freeze case was filed in the same court
The report also noted that two Thai businessmen sued Tether in the same court on Aug. 31 over about $42.4 million frozen in October 2025. They said the freeze was carried out at what they described as the informal request of a U.S. government agent, months before a seizure warrant was issued.
Tether has not publicly addressed Conduit’s lawsuit.
CEO Paolo Ardoino said in a Sept. 28 company release about Iran-related freezes that Tether can act when credible information is provided by law enforcement. That release came the same day Sen. Richard Blumenthal asked the Treasury Department and the Justice Department to investigate Tether’s sanctions compliance.
What Conduit is asking the court to do
Conduit wants the court to order the wallet unfrozen and award at least $2.76 million in damages, the interest Tether has earned on reserves backing the frozen tokens, and punitive damages.
The company also said an Aug. 19 demand letter received no reply.