Conduit Sues Tether Over $2.76M Treasury Freeze That Forced Mass Layoffs

Conduit Technology filed a lawsuit in Manhattan federal court on October 5, alleging Tether froze $2.76 million of its working capital without a direct law enforcement mandate. The freeze occurred during a Brazilian Federal Police probe into a separate entity, but Conduit claims Brazilian courts have formally acknowledged it was not a target of the investigation. According to the complaint, Tether’s T3 Financial Crime Unit used its own "undisclosed criteria" to lock the wallet in September 2025, crippling Conduit's ability to pre-fund client payments and forcing layoffs and office closures. The wallet was heavily utilized as Conduit's primary operating account before the freeze, moving over $1.1 billion across 4,427 transactions in four months without interacting with the specific entities targeted by the Brazilian probe. "Tether can act when credible information is provided by law enforcement." — Paolo Ardoino