On Tuesday, October 6, 2026, Finance Feeds reported that cross-border payments firm Conduit Technology filed a lawsuit against Tether, alleging the stablecoin issuer froze roughly $2.76 million in USDT held in its corporate treasury wallet for more than a year without a court order.
According to the report, the complaint was filed October 5 in the U.S. District Court for the Southern District of New York. It names four defendants: Tether Holdings, Tether International, Tether Operations and Tether Investments. Conduit is asking the court to restore access to the tokens and to award compensatory damages of at least $2.76 million. It also seeks consequential and punitive damages, as well as disgorgement of income allegedly earned on the reserves backing the frozen USDT.
The dispute stems from a Brazilian Federal Police investigation involving two firms, Bull Intermediação de Negócios and Onix Intermediações, both of which had previously used Conduit’s platform. Conduit alleges that Brazilian police never identified its treasury wallet as an address to be frozen. According to the complaint, police shared a group of suspected wallets with Tether’s T3 Financial Crime Unit, which then applied its own criteria to decide which additional wallets to restrict. Conduit says its wallet was among those Tether selected independently.
The company also alleges that a Brazilian court confirmed it was neither an investigated party nor among the companies whose assets were ordered frozen.
Timing forms a central part of Conduit’s argument. The complaint states that Onix’s last transaction on the platform took place April 22, 2025, while the treasury wallet was not created until May 20. Conduit says the wallet went on to process 4,427 transactions involving 78 counterparties and more than $1.1 billion in volume before the freeze in September, none of which involved Onix.
The wallet was held through a Fireblocks institutional custody account, and Conduit says only its own treasury employees held signing authority. The USDT nonetheless became non-transferable, because Tether controls administrative functions at the token level.
Conduit’s legal claims include conversion, unjust enrichment, breach of fiduciary duty, and a violation of the federal Computer Fraud and Abuse Act. It also seeks declaratory relief and an accounting. On the computer fraud claim, Conduit alleges Tether used its administrative infrastructure to change the wallet’s status and block transfers without authorization. The company further argues that Tether continued to earn income from the reserve assets backing the frozen tokens.
Conduit says the loss of working capital reduced its ability to settle transactions at its previous speed and volume and contributed to layoffs and office closures.
The case comes as USDT usage in payments grows. Finance Feeds reported that USDT accounted for about $95 billion in identified commerce payments during the first half of 2026, with strong use in business-to-business and cross-border transfers.
Tether has increasingly relied on issuer-level controls to immobilize addresses. Finance Feeds recently reported on a $3.75 million blacklist wave covering 18 USDT addresses, noting that a freeze alone does not establish criminal ownership or misconduct. Tether’s T3 initiative, run with Tron and TRM Labs, had frozen $300 million linked to illicit activity by late 2025, according to earlier Finance Feeds reporting. Tether has also said it froze nearly $550 million in Iran-linked USDT during 2026 at the direction of U.S. authorities.
Source: Finance Feeds
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