Cross-border payments platform Conduit Technology has accused stablecoin issuer Tether of freezing $2.76 million in USDt (USDT) without explanation in September 2025.

In a complaint filed Monday in the US District Court for the Southern District of New York (court filing), Conduit alleged that Tether blocked funds to which the issuer had “no legal entitlement” and “no claim.” The company said it began holding USDt as part of its digital treasury wallet in May 2025, and that Tether froze the full $2.76 million in September with “no justification” — an action Conduit claimed “materially impacted its business.”

The dispute turns on a structural feature of stablecoins: as the issuer of USDT, the largest stablecoin by market capitalization, Tether can freeze tokens directly, leaving a holder unable to move its balance while a freeze remains in place. For companies that keep USDT in their treasuries, the allegations show how a working balance can be rendered inaccessible by the issuer’s own determination, with recourse running through litigation rather than through the token itself.

“The funds are unequivocally Conduit’s, but Tether has taken them and is denying Conduit access to them,” the complaint alleged, adding: “Tether is not allowed to take money from businesses just because they chose to store that money in Tether’s currency.”

According to the lawsuit, the freeze was connected to a Brazilian federal police investigation launched in 2024 into the financial intermediary Bull Intermediação de Negócios and Onix. Tether allegedly identified Conduit’s treasury wallet as tied to those companies “on its own initiative using its own criteria,” freezing the $2.76 million on Sept. 24, 2025.

The complaint contains only Conduit’s account of the events, and its allegations have not been tested in court. Conduit said it had repeatedly asked Tether to unfreeze the funds, but the issuer had not done so as of Monday. Cointelegraph reached out to Tether for comment on the lawsuit but did not receive an immediate response.

The case came about a month after two Thai nationals sued Tether for allegedly freezing $42.4 million in USDt following what they called an “informal request” from US Homeland Security Investigations. Those funds were allegedly part of a $61 million pig butchering case filed in the US District Court for the Eastern District of North Carolina, which issued a seizure warrant for the USDt in February.

Taken together, the two lawsuits have put Tether’s freeze authority before US courts — invoked, per the complaints, both at the issuer’s own initiative and following a law enforcement request — an issue that extends to any business holding USDT. Both matters remain pending, and a formal response from Tether, once filed, would present the issuer’s position on a freeze it has not yet publicly addressed.