Conduit sues Tether over allegedly freezing $2.8M without explanation
Reported by Cointelegraph · AI-assisted summary by ChikoCorp AI News Desk
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Summary
Conduit Technology, a cross-border payments platform, filed a lawsuit against stablecoin issuer Tether, accusing it of freezing $2.76 million in USDt (USDT) in September 2025 without explanation. Conduit claims the funds are rightfully theirs and that Tether improperly froze the stablecoin, severely impacting Conduit's business. The freezing was allegedly linked to a Brazilian federal police investigation involving another financial intermediary, with Tether identifying Conduit’s wallet on its own initiative.
Why it matters
The source does not explicitly state why this development matters, but it highlights potential risks and disputes around stablecoin custody and the unilateral freezing of funds by issuers. It may signal challenges for businesses relying on stablecoin liquidity and raise questions about issuer transparency and policy enforcement.
Key context
The lawsuit arose after Tether froze the funds purportedly due to connections with ongoing investigations in Brazil, using its own criteria to identify related wallets. This legal action follows a similar case in which Tether was sued for freezing $42.4 million in USDt tied to a criminal investigation in the US. No prior resolution or details of Tether’s policies regarding freezes are provided in the source.
Key numbers and entities
Conduit Technology alleges $2.76 million in USDt was frozen by Tether. The Brazilian federal police and financial intermediaries Bull Intermediação de Negócios and Onix are involved in the underlying investigation. A related case involved $42.4 million frozen and a $61 million pig butchering fraud suit in the US.
What remains unclear
The source does not provide Tether’s response or justification for freezing Conduit's funds beyond the connection to the Brazilian investigation. The criteria Tether uses for freezing wallets and details of Conduit’s attempts to resolve the issue remain unspecified. The outcome or timeline of the lawsuit is also not included.