Tether Says Under 0.034% of USDT Issuer Assets Sit at Seizure-Hit EQIBank

Under 0.034% at EQIBank

Tether has moved to contain the fallout from a United States asset seizure at one of its banking partners, stating that less than 0.034% of the group's assets sit at EQIBank, a Dominica-licensed offshore lender now caught in a federal forfeiture action. The stablecoin issuer behind USDT did not disclose an exact dollar figure, but set against the $187.75 billion in total assets reported in its second-quarter reserves report, that percentage implies exposure of no more than about $64 million. News of the relationship first surfaced in an X post published on Sept. 24. The issuer moved quickly to quantify its exposure after EQIBank warned that the seizure could ultimately force it into liquidation.

X posthttps://x.com/Yueqi_Yang/status/2103188614868038003

EQIBank's role in Tether's operations was narrow but sensitive: the offshore bank handled wire transfers tied to purchases and redemptions of USDT, the redemption plumbing that keeps the token's dollar peg intact. In an emailed statement, a Tether spokesperson said the company “had no knowledge” of the conduct by Capstone — the US payments firm at the center of the seizure — that the Department of Justice has alleged. A $64 million exposure is a rounding error next to a reserve stack that would dwarf most crypto whale treasuries, one backed largely by short-dated instruments of the kind that also collateralize an S&P 500 ETF. Analysts see no immediate threat to USDT's reserves or its dollar peg — but the episode highlights how much of the stablecoin economy still runs through small offshore banks rather than the large, regulated venues institutional users typically prefer.

The $84.2 Million Forfeiture

According to filings in the case, EQIBank kept its funds with Capstone Ltd., a US payments company that held the money in its own name at Wells Fargo, JPMorgan Chase and other banks. Federal prosecutors allege Capstone misrepresented its business to those banks while moving wire transfers for the lender — transfers that included Tether's USDT purchase and redemption flows. The bank began learning around April 2 that the funds had been frozen, and formal seizure warrants followed around June 1. In June, its lawyers wrote that the government's allegations initially appeared to center on representations Capstone may have made to Wells Fargo and the other banks involved.

In a sworn declaration filed the same month, EQIBank co-founder Christopher Burke said the seized money made up roughly 80% of the bank's financial assets and that it “cannot operate much longer” without some of it. He added that Dominica's Financial Services Unit placed EQIBank under enhanced supervision on June 5 — a step he described as preparation for the regulator to take over and liquidate the bank if it cannot repay depositors. Judge Dale A. Drozd of the Eastern District of California rejected the bank's bid to recover the funds on July 16, ruling that the court lacked equitable jurisdiction once prosecutors had filed a civil forfeiture case over the Capstone accounts the day before. That action is wide-ranging: a Sept. 14 order covers about $83 million held in Capstone's name at Wells Fargo and JPMorgan Chase, plus roughly 1.18 million USDT pulled from two Tron addresses — tokens frozen on a public ledger, the kind of cross-chain movement that Wormhole-style messaging rails make traceable — for a combined total of about $84.2 million. Readers tracking the market in real time can follow live spot and futures prices on Bybit.

Counterparty Risk Comes Into Focus

The load-bearing document here is the Sept. 14 order entered in the Eastern District of California forfeiture docket: it fixes the government's claim at roughly $83 million in banked funds plus 1.18 million USDT — about $84.2 million in total — and gives the dispute a firm legal perimeter. The thread running through both developments is stablecoin counterparty risk. Unlike a DAO whose treasury sits in publicly auditable on-chain wallets, Tether's bank placements surfaced only through litigation and a single disclosure. With excess reserves at $4.11 billion at the end of June, down from $8.23 billion three months earlier, the margin for banking-side surprises has narrowed — and diligence on banking counterparties now matters as much as the fee comparisons traders run across the best crypto exchanges.