Conduit vs. Tether Explained: The $2.76M USDT Freeze and Stablecoin Issuer Power
Stablecoin issuers have spent years demonstrating why freeze controls can be useful. A hacked exchange can identify stolen USDT. Law enforcement can trace the tokens. Tether can prevent a blacklisted balance from moving. Conduits new lawsuit asks the opposite question: What happens if the issuer freezes the wrong wallet — or freezes a legitimate business without a clear legal process for challenging the decision? Conduit Technology, a cross-border payments company that uses stablecoins to move money internationally, filed suit against Tether entities in the U.S. District Court for the Southern District of New York. The company alleges that Tether froze approximately $2.76 million of USDT in a Conduit treasury wallet on September 24, 2025 and has refused to release the funds for more than a year. Conduit says the wallet functioned like an operating bank account. It is asking the court to order an unfreeze, award at least another $2.76 million in damages and account for profits Tether allegedly earned from reserves backing the frozen tokens. Those are Conduits allegations. Tether had not publicly answered the claims in the reporting reviewed for this article. No court has ruled that the freeze was improper. That distinction is central.The Case Is Not About Whether Tether Can Technically Freeze USDT Tethers technical power is well established. USDT is









