Crypto Firm Sues Tether Over Year-Long USDT Freeze
Conduit Sues Tether Over a $2.76M USDT Wallet Frozen for a Year
Conduit Technology has sued stablecoin issuer Tether after Tether froze $2.76 million in USDT held in Conduit’s wallet and allegedly kept the funds locked for more than a year.
According to Conduit, the freeze was not driven by a formal request tied to its wallet. The company claims that Brazilian police never asked Tether to freeze Conduit’s treasury address, and that Tether’s own financial crime unit selected the address using internal criteria.
The lawsuit lands as Tether emphasizes its role in law enforcement cooperation. In a separate, high-profile action, Tether and crypto exchange OKX froze $225 million in USDT in coordination with the U.S. Department of Justice (DOJ). The companies described that operation as the largest stablecoin freeze to date.
That DOJ-linked freeze was tied to an investigation into a Southeast Asian human trafficking syndicate alleged to have used “pig butchering” romance scams. U.S. authorities have highlighted the scale of losses from these schemes, with the FBI reporting $3.3 billion in losses to the scam affecting U.S. citizens last year.
The DOJ-related investigation used blockchain analytics tools from Chainalysis, and the frozen funds were held in external self-custodied wallets. Tether said the wallets were not associated with Tether’s direct customers, meaning legitimate users on its platform would not be affected.
Together, the two situations underscore a central tension in crypto markets: stablecoins like USDT are designed to move like cash on blockchains, but issuers can still freeze assets at specific addresses when responding to investigations or internal compliance triggers.
- What happened: Conduit says $2.76 million in its USDT was frozen by Tether and remained inaccessible for over a year.
- Why it matters: The dispute highlights the power stablecoin issuers have to restrict funds on-chain, even outside exchanges.
- Broader context: Tether and OKX recently froze $225 million in USDT in a DOJ-linked case targeting a human trafficking scam network, reflecting growing law enforcement collaboration.
