TL;DR:
- Conduit Technology filed a federal lawsuit against four Tether entities demanding the return of 2.76 million USDT and equivalent compensatory damages.
- The affected corporate wallet accumulated over $1.1 billion in transaction volume prior to the freeze executed on September 24, 2025.
- The Brazilian Federal Police and local criminal courts confirmed that Conduit’s address was not included on the official seizure list.
Payments infrastructure firm Conduit sues Tether in the United States District Court for the Southern District of New York after the freezing of $2.76 million in the stablecoin USDT, an action carried out in September 2025 that the company describes as arbitrary and lacking direct judicial backing.
The legal complaint names Tether Holdings S.A. de C.V., Tether International S.A. de C.V., Tether Operations S.A. de C.V., and Tether Investments S.A. de C.V. as defendants. Conduit maintains that the affected wallet had served as a corporate treasury since May 20, 2025.
Judicial records show that the frozen balance remained at 2,760,000 USDT as of September 30, 2026. Data presented in the filing indicates that the account processed 4,427 transactions across 78 counterparties, moving more than $1.1 billion before the restriction was placed.
Conduit argues that Tether froze the funds on September 24, 2025, without prior notice or formal justification. In August 2026, legal counsel for the plaintiff sent direct demands requesting the release of the capital, which received no constructive response.
The origin of the withholding stems from judicial inquiries in Brazil targeting the companies Onix Intermediações Ltda. and Bull Intermediação de Negócios Ltda. Conduit asserts it has no commercial ties to those entities. The firm further notes that its treasury account was created nearly a month after Onix’s final transaction across its infrastructure.
According to the court docket, the Brazilian Federal Police shared a list of suspicious addresses with Tether’s T3 Financial Crimes Unit. The plaintiff contends that its wallet was not part of that list and that Brazilian judicial authorities subsequently confirmed they never ordered the freezing of Conduit’s assets.
Legal Dispute Over Centralized Control of Digital Assets
The lawsuit includes formal causes of action for conversion, unjust enrichment, breach of fiduciary duty, and computer fraud under U.S. federal law. Conduit is seeking a declaratory judgment establishing that the stablecoin issuer lacks the authority to unilaterally freeze funds held in third-party corporate wallets.
The complaint also demands a full accounting of reserves tied to the blocked tokens. Conduit seeks the disgorgement of any yield or interest those funds may have accrued in Tether’s favor during the duration of the freeze.
The inability to access these assets disrupted the firm’s operations. According to Conduit’s complaint, the withheld balance constituted a critical portion of its working capital, impairing its capacity to settle and pre-fund client transactions.
The liquidity constraint led to staff reductions and the closure of operational offices. Consequently, the company is seeking at least $2.76 million in compensatory damages, alongside compensation for lost business opportunities and damaged corporate relationships.
The litigation arrives amid heightened scrutiny surrounding Tether’s operational practices. According to a U.S. Senate Permanent Subcommittee on Investigations report cited by The Wall Street Journal, 84% of 846 analyzed accounts linked to Iran-related operations made use of USDT.
Tether also maintains financial exposure to EQIBank, a Dominica-licensed banking institution placed into liquidation proceedings after an $84.2 million U.S. court seizure in July 2026. Corporate disclosures from Tether indicate that this stake represents less than 0.034% of the issuer group’s total balance sheet.
The New York federal court is expected to schedule preliminary hearings to review the pleadings and set the timeline for Tether’s formal response.
