Tether Limits EQIBank Exposure After $84.2M Seizure

U.S. prosecutors seized roughly $84.2 million from accounts and wallets linked to payments firm Capstone Ltd., a move that froze a large portion of EQIBank’s liquid holdings and prompted Tether to disclose its exposure at the Dominica-licensed bank.

A September 14, 2026 federal court order lists about $79.11 million in a Wells Fargo Securities account held in Capstone’s name, $1.86 million in a second Wells Fargo account, roughly $2.06 million at JPMorgan Chase and about 1.17 million USDT across two addresses, for a total of about $84.2 million. EQIBank has described its own loss at about $89 million; the figures have not been reconciled publicly.

Tether confirmed a banking relationship with EQIBank and said assets it holds there represent less than 0.034% of the group’s assets for the quarter ended June 30. Against Tether’s reported $187.75 billion in group assets for that quarter, the percentage implies an upper-bound exposure of roughly $64 million. Tether noted the company ‘had no knowledge of the conduct the Department of Justice alleges against Capstone.’ Tether has not been charged.

The Department of Justice filed a civil forfeiture complaint on July 15, 2026 in the U.S. District Court for the Eastern District of California. Prosecutors allege Capstone operated as an unlicensed money transmitter in at least six states while presenting itself to banks as an ordinary technology services company. Court filings say a cyber-fraud group used Capstone’s accounts to move stolen funds, and some of those funds were converted to USDT.

Court filings identify Capstone’s owners as Kotaro Shimogori and Mary Jeanne Thompson. Their attorney has denied wrongdoing and intends to challenge the forfeiture complaint. EQIBank sought to recover the frozen funds in court, arguing it was an innocent owner misled about Capstone’s registration and operations; Judge Dale A. Drozd denied EQIBank’s motion on July 16 on procedural grounds. EQIBank warned on September 9 that the freeze, which it said covered roughly 80% of its monetary holdings, could force the institution into liquidation.

The seized property included both fiat balances at major U.S. banks and cryptocurrency holdings denominated in USDT. Under the forfeiture rules, claimants have 21 days to answer the government’s complaint once a formal claim is filed. The civil case remains unresolved and any restitution or reallocation of losses has not been determined in court.

Attestations by issuers report the assets held in reserve but do not audit the chain of processors and correspondent banks that move customer dollars in and out of those reserves. Capstone served as an intermediary between an offshore bank and the U.S. banking system; authorities blocking intermediary accounts can interrupt the channels that process deposits and redemptions.

Tether reported an excess reserve buffer of $4.11 billion at the end of June, down from $8.23 billion three months earlier. Regulators are considering measures to increase transparency, including proposals for monthly reserve reports certified by chief executives and chief financial officers. The events underscore the legal and operational issues that can arise when firms rely on offshore or lightly regulated partners to move fiat funds through the U.S. banking system.