International payments company Conduit has initiated legal action against USDT creator Tether, stating that the firm locked $2.76 million belonging to Conduit and has declined to unlock the assets or provide a reason for the restriction.
The legal document was submitted on Monday within the Southern District of New York, where Conduit pointed out that it has been blocked from accessing the stablecoins for over twelve months.
“Conduit owes no money to Tether and has no obligation to Tether,” the court submission specifies.
Conduit leverages stablecoins such as Tether’s USDT and Circle’s USDC to facilitate international transactions spanning upwards of 100 nations. The legal paperwork notes that the specific digital address blocked by Tether functioned as “the equivalent of [Conduit’s] operating bank account.”
The asset freeze reportedly arises from an inquiry directed to the Brazilian Federal Police concerning Onix Intermediações, a past client of Conduit.
Nevertheless, Conduit reports that authorities verified they never requested a freeze on the payment processor’s main treasury wallet and remain unclear as to why Tether implemented the restriction. Furthermore, it asserts that a court in Brazil verified Conduit was not a target of the investigation linked to Onix Intermediações.
As stated in the court records, Conduit mentions that Onix stopped utilizing its services in April 2025, approximately one month prior to the establishment of the treasury wallet, and maintains that the wallet never contained any assets belonging to Onix.
Since the address was vital for everyday business functions, Conduit argues that its enterprise has incurred damages, whereas Tether keeps generating yield from the asset reserves supporting the restricted USDT.
The legal action seeks both the unfreezing of the $2.76 million in locked assets alongside an identical $2.76 million in extra damages and financial gains it claims Tether accumulated via the reserves.
Originally published at https://www.theblock.co/news/regulation/2026-10-06-conduit-sues-tether-usdt-freeze-417831.
