Conduit Sues Tether Over $2.76 Million Frozen in Treasury Wallet

The dispute centers on a wallet blocked by Tether on September 24, 2025. Conduit contends that its address was never identified by Brazilian Federal Police during their investigation into financial intermediaries Bull Intermediação de Negócios and Onix Intermediações. According to the complaint, Tether’s T3 Financial Crime Unit independently selected the address for restriction, a move Conduit claims lacked any underlying police instruction or legal justification. The plaintiff asserts that the wallet held working capital rather than customer funds, and its immobilization caused significant operational damage, including layoffs and office closures.

Tether maintains broad technical authority to blacklist addresses when it deems such actions prudent under its terms of service or necessary for legal compliance. This case tests the limits of that power, as Conduit argues that Tether’s internal risk assessments do not supersede property rights. While Tether often collaborates with law enforcement to freeze assets tied to criminal activity, Conduit is seeking the restoration of its funds, damages for lost liquidity, and a portion of the reserve profits generated while the assets were held. The court must now determine whether Tether exceeded its legal authority, a question that follows a similar, ongoing legal challenge involving $42.4 million in frozen assets linked to an investigation by U.S. authorities.