Payments firm sues Tether for freezing $2.76M in USDT reserves over an unrelated Brazilian investigation and refusing to release funds for over a year.
DeFi & Yields ·
Cross-border payments company Conduit filed suit in New York federal court alleging that Tether froze $2.76 million held in its operating wallet on September 24, 2025, without legitimate cause and has withheld the funds for over a year while collecting interest on the backing reserves. According to the complaint, Tether's Financial Crime Unit independently initiated the freeze citing a Brazilian police investigation into an unrelated third party, despite Conduit's wallet being created after that party's final transaction and never holding any of its funds. The liquidity lockout has forced Conduit to reduce staff and shut offices, and the firm seeks return of the funds plus damages under claims including conversion and unjust enrichment. The lawsuit reflects growing questions about Tether's unilateral authority to immobilize stablecoins, following a separate $42.4 million freeze case earlier this year.