Conduit Technology Sues USDT Issuer Tether Over Frozen Funds in New York Court
Conduit Technology is suing USDT issuer Tether in a New York federal court, demanding the release of $2.76 million in frozen funds and damages over an allegedly improper asset freeze.
American payment firm Conduit Technology is suing Tether, the issuer of the USDT stablecoin, in the U.S. District Court for the Southern District of New York, alleging that the company froze approximately $2.76 million in USDT held in its wallet.
According to the complaint, the freeze was executed on September 24, 2025, by Tether's T3 financial crime unit as part of an investigation by the Brazilian Federal Police. Conduit's central claim is highly unusual: the investigation involved a Brazilian brokerage firm named Onix, a former client of the plaintiff that stopped using the platform in April 2025.
Conduit asserts that its wallet was created only on May 20, 2025, and never held funds belonging to Onix. The company adds that Brazilian law enforcement did not flag its wallet as part of the probe, and that a Brazilian court confirmed Conduit itself was not a target of the investigation.
Conduit is asking the court to rule that Tether lacked the authority to freeze the funds, order their release, and award at least $2.76 million in damages. Additionally, it demands further compensation, including profits it claims Tether generated from reserves tied to the frozen capital. At this stage, these are allegations raised in a complaint and have not yet been adjudicated.
The case adds to another lawsuit filed in August in New York, where two Thai businessmen claimed Tether froze about 42.4 million USDT following an informal request by an unauthorized party, months before an official court order was secured. Tether, for its part, emphasizes that it cooperates with law enforcement agencies worldwide and freezes assets when it identifies links to illicit activity.
