Cross-border payments platform Conduit Technology has filed a formal lawsuit against stablecoin issuer Tether, alleging that the company unlawfully froze $2.76 million in USDt without explanation in September 2025.
In a complaint filed on Monday in the US District Court for the Southern District of New York, Conduit claims that Tether seized funds belonging to the payments platform to which it holds "no legal entitlement" and "no claim." According to the court filing, Conduit began holding USDt as a component of its digital treasury wallet operations in May 2025. However, the situation escalated dramatically in September when Tether froze the entirety of the $2.76 million stablecoin balance with what the company describes as "no justification"—an enforcement action that Conduit asserts has materially and negatively impacted its day-to-day business operations.
"The funds are unequivocally Conduit’s, but Tether has taken them and is denying Conduit access to them," the company alleged in its legal complaint. The firm further emphasized the broader implications of the stablecoin issuer’s actions, stating that "Tether is not allowed to take money from businesses just because they chose to store that money in Tether’s currency."
According to the details outlined in the lawsuit, the freezing of Conduit’s treasury assets was tied to an ongoing international investigation. The controversy stems from a Brazilian federal police probe launched in 2024 into certain financial intermediaries, specifically Bull Intermediação de Negócios and Onix. Tether allegedly identified Conduit’s corporate treasury wallet as being associated with these entities "on its own initiative using its own criteria," leading to the freezing of the $2.76 million on September 24, 2025.
Conduit stated in the legal documents that it had repeatedly reached out to Tether through various channels to request the release of the frozen funds, but as of Monday, the stablecoin issuer had not reversed the action or restored access to the treasury wallet. When contacted for comment regarding the lawsuit, representatives did not immediately respond.
This high-stakes legal action arrives roughly a month after a similar controversy involving Tether and frozen digital assets. In a separate case, two Thai nationals filed a lawsuit against Tether after the company allegedly froze $42.4 million in USDt. That enforcement action reportedly followed what the plaintiffs described as an "informal request" from US Homeland Security Investigations. Those particular funds were linked to a broader $61 million "pig butchering" financial fraud case filed in the US District Court for the Eastern District of North Carolina, which ultimately issued a formal seizure warrant for the disputed USDt in February.
The legal challenge by Conduit Technology highlights the ongoing and complex tensions between centralized stablecoin issuers, corporate treasury holders, and international law enforcement agencies. As stablecoins become increasingly integrated into mainstream global commerce and cross-border payment rails, issuers like Tether routinely implement compliance and risk-mitigation measures, including freezing addresses suspected of illicit activity. However, incidents where corporate entities claim their legitimate operational funds are caught in wide-net compliance sweeps have begun testing the legal boundaries of digital asset custody, corporate property rights, and the extent of a private issuer’s authority to freeze blockchain-based funds.
