USDT Frozen: What Tether's Clause Allows

Hold USDT and you do not hold a bank balance but a claim against a private company. That company can put individual addresses on a blacklist, and it does so regularly. The power to do it sits in Tether's own terms of service, and it reaches further than most holders assume: Tether may freeze a balance when a law requires it, and in addition whenever the company considers it prudent at its own discretion.

Since October 5, 2026, a suit before a US federal court has been attacking exactly that clause. The payments company Conduit Technology filed in Manhattan because 2.76 million USDT from its corporate treasury have been frozen since September 24, 2025. Press coverage of recent days reports the events. The follow-up question a holder has goes unanswered: what does a freeze like that rest on, and what follows from it for your own balance?

This article reads the governing passage in the original, sets out what is disputed about it, and derives from that the points you can check against your own position. It does not prejudge a ruling, because the dispute is open.

What Tether's Terms of Service Literally Allow When Freezing USDT

What governs are the Token Terms of Sale and Service, Tether's own rulebook for the purchase, redemption and custody of its tokens. In the version dated February 26, 2026, it says there that Tether may suspend or terminate access to its services and "freeze any Tether Tokens held by you". The sentence then names three triggers: where applicable law requires it, where you have breached the terms or applicable law, and where Tether "in its sole discretion, determines it is prudent to do so".