Payments Firm Says Tether Froze $2.76 Million Brazilian Police Didn’t Flag, Forcing Layoffs
By Unchained
AI summary of the source article
Conduit Technology filed a lawsuit in the Southern District of New York alleging Tether froze $2.76 million of its working capital. The freeze occurred amid a Brazilian Federal Police probe into entities linked to Bull Intermediação de Negócios, but Conduit states its wallet was not on the police list and a Brazilian court confirmed it was not a target. Conduit alleges Tether froze the wallet based on undisclosed internal criteria. The wallet served as Conduit's operating account to pre-fund client payments, having processed over $1.1 billion across 4,427 transactions in four months. Conduit claims the freeze forced layoffs and office closures, and seeks unfreezing of the funds and damages.
Why it matters
The lawsuit highlights operational risks for fintechs relying on stablecoin issuers for working capital and challenges Tether's unilateral discretion in freezing user wallets during law enforcement inquiries.
Key facts
- Conduit Technology sued Tether in Manhattan federal court over a $2.76 million frozen wallet used as working capital.
- Conduit alleges its wallet was not on the suspect list submitted by Brazilian Federal Police to Tether's T3 Financial Crime Unit.
- The company says the freeze disrupted operations, reduced processing volume, and led to layoffs and office closures.