Tether Hit With Lawsuit Over $2.76 Million Stablecoin Freeze

In brief

• Conduit sued Tether in New York federal court, alleging the stablecoin issuer froze $2.76 million in its treasury wallet on Sept. 24, 2025, without justification and has refused to release it.
• The firm says a Brazilian police probe into a third party, Onix, was the backdrop, but its wallet was created after - Onix's last transaction, never held Onix funds, and was flagged by Tether's own unit—not police. Conduit says the freeze forced layoffs and office closures while Tether earned interest on the backing reserves.

Cross-border payments company Conduit is taking Tether to court, alleging the stablecoin giant froze $2.76 million of its money without justification and has refused for more than a year to release it.

In a complaint filed Monday in the U.S. District Court for the Southern District of New York, Conduit says Tether froze its treasury wallet, essentially the digital equivalent of its operating bank account, on Sept. 24, 2025, and has since kept the funds locked while profiting from the reserves backing them.

The suit brings claims including conversion, unjust enrichment, breach of fiduciary duty and computer fraud, and demands the funds be returned.

At the heart of the dispute is a Brazilian investigation that Conduit says has nothing to do with it. According to the filing, Brazil's Federal Police were probing entities tied to a firm called Onix, which had once used Conduit's platform.