$2.76 million is small money for Tether, issuer of the world’s largest stablecoin. For Conduit, a cross-border payments firm working in more than 100 countries, it was the balance of a wallet it describes as the equivalent of its operating bank account.
Conduit sued Tether on Monday in the US District Court for the Southern District of New York, The Block and Decrypt reported. It wants the USDT released and the same amount again in damages.
According to the complaint, Tether froze the wallet on 24 September 2025. The dispute traces back to a Brazilian case involving Onix, a former customer.
Conduit’s argument rests on dates. It says Onix stopped using its platform in April 2025 and that the treasury wallet was created only in May, so it never held Onix funds. It says Brazil’s Federal Police did not flag the wallet, and that a Brazilian court confirmed Conduit was not under investigation. The complaint says the decision was instead taken independently by Tether’s own T3 Financial Crime Unit.
The wallet was busy. Decrypt reports it had processed more than $1.1 billion in about four months before it was frozen. Conduit claims the freeze forced layoffs and office closures while Tether went on earning interest on the reserves behind the tokens.
These are one side’s allegations. Neither report carried a response from Tether, and its reason for keeping the wallet frozen is not known.
An issuer’s power to freeze tokens is usually presented as a service to law enforcement. This case asks what happens when there is no request behind it, and whether a holder that says it owes Tether nothing has any route of appeal short of a federal court.
