Conduit Sues Tether Over $2.76M in Frozen USDT

Published October 7, 2026, 00:20 UTC. Based on the complaint filed October 5, 2026, in the U.S. District Court for the Southern District of New York, as reported by The Block and Cointelegraph.

Cross-border payments firm Conduit Technology sued USDT issuer Tether on October 5, 2026, alleging the stablecoin company froze $2.76 million of Conduit’s funds more than a year ago and has refused to release them or explain the freeze, The Block reported.

The $2.76 million freeze

According to the complaint, filed Monday in the Southern District of New York, Conduit began holding USDT as part of its digital treasury wallet in May 2025, and Tether froze all $2.76 million of the stablecoin in September of that year, Cointelegraph reported. Conduit has been locked out of the funds ever since. “Conduit owes no money to Tether and has no obligation to Tether,” the filing reads. The complaint calls the frozen wallet the “equivalent of [Conduit’s] operating bank account,” The Block reported. Conduit uses stablecoins, including Tether’s USDT and Circle’s USDC, to move money across more than 100 countries.

The suit asks the court not only to order Tether to release the $2.76 million, but to award at least another $2.76 million in additional damages and profits, on the argument that Tether has continued to collect interest on the reserves backing the blocked USDT while Conduit’s business suffered.

A Brazilian investigation that never named it

The freeze allegedly traces to a Brazilian federal police investigation launched in 2024 into the financial intermediary Bull Intermediação de Negócios and Onix, a former Conduit customer, Cointelegraph reported. According to The Block, Tether allegedly identified Conduit’s treasury wallet as tied to those companies on its own initiative, using its own criteria.

Conduit says law enforcement confirmed it never flagged the payment provider’s treasury wallet for freezing, and that a Brazilian court confirmed Conduit was not under investigation in the case involving Onix Intermediações, The Block reported. According to the filing, Onix has not used Conduit’s platform since April 2025, roughly a month before the treasury wallet was created, and the wallet never held any of Onix’s funds.

The second Tether freeze suit in two months

Conduit’s complaint lands about a month after two Thai nationals sued Tether in the same court over a $42.4 million USDT freeze, Cointelegraph noted. In that case, filed August 31, the plaintiffs allege Tether blacklisted ten Ethereum addresses holding 42,417,785.62 USDT on October 30, 2025, after an informal request from a Homeland Security Investigations agent, months before a magistrate judge in the Eastern District of North Carolina issued a formal seizure warrant on February 19, 2026, as The Cryptonomist reported. The central question in both suits is the same: when, and on what authority, can a stablecoin issuer freeze tokens without a court order.

Cointelegraph said it reached out to Tether for comment on the Conduit suit but did not receive an immediate response.

This article is news reporting and is not investment advice.

Sources

• U.S. District Court for the Southern District of New York, Conduit Technology complaint against Tether (filed Oct. 5, 2026), primary source
• The Block, Conduit sues Tether over $2.76 million freeze, says it has ‘no legal entitlement’ to funds (Oct. 6, 2026)
• Cointelegraph, Tether allegedly froze $2.8M USDT without explanation: Conduit lawsuit (Oct. 6, 2026)