Tether: The United States Seizes $84 Million from a Banking Intermediary
Crackdown on USDT plumbing. The US justice system seeks to confiscate approximately $84.2 million held in accounts and wallets linked to Capstone Limited. According to federal prosecutors, this payment company allegedly allowed EQIBank, a digital bank licensed in Dominica, to transfer hundreds of millions of dollars for Tether and Bitfinex through US banking rails.
Neither the issuer of USDT nor the exchange platform is directly prosecuted in this procedure. The case targets the assets of Capstone and the banking circuit used to move the funds.
Key Points
- US authorities are targeting approximately $84.2 million held in accounts linked to Capstone and two USDT wallets.
- Capstone allegedly processed hundreds of millions of dollars under the instruction of EQIBank without having the necessary licenses.
- EQIBank claims that the seizures amount to approximately $89 million, or nearly 80% of its cash holdings.
- Tether assesses its exposure to EQIBank at less than 0.034% of its total assets.
Tether and Bitfinex: $84.2 Million Seized from Capstone
The federal court order from California read by FT teams details the affected assets: $79.11 million in a Wells Fargo Securities account, $1.86 million at Wells Fargo Bank, and $2.06 million at JPMorgan Chase. Two wallets containing approximately $1.18 million in USDT complete the list. The total amounts to approximately $84.2 million.
The government is using a civil forfeiture procedure. Unlike a criminal prosecution, it targets property suspected of being linked to an offense and does not require prior conviction of its owner. Capstone and EQIBank can, however, contest the seizure in court.
According to the complaint, Capstone allegedly served as an intermediary between EQIBank and US banks. The company is said to have executed transfers on behalf of Tether and Bitfinex while presenting a less risky activity to financial institutions than what was actually conducted. Prosecutors suspect this involved fund transmission activities without the necessary records and licenses.
At this stage, these elements remain allegations. No criminal charges against Capstone, EQIBank, Tether, or Bitfinex accompany this procedure. However, a judge has rejected a separate request filed by EQIBank for immediate restitution of funds: the bank will have to defend its rights in the forfeiture case.
  A partner of Tether and Bitfinex implicated by US justice -- Source: X Account
EQIBank Weakened, but Limited Exposure for Tether
EQIBank presents a slightly different amount. The bank estimates that nearly $89 million, or about 80% of its cash holdings, have been seized and warns that a definitive confiscation could threaten its business continuity. This estimate does not exactly match the $84.2 million listed in the order, likely because the two parties do not retain the same scope.
Tether acknowledges holding assets with EQIBank, but claims that this exposure represents less than 0.034% of its total assets. The company has not disclosed a specific amount. This proportion makes a direct material effect on USDT reserves unlikely, even assuming the funds remain frozen.
The case nonetheless recalls Tether and Bitfinex's past banking difficulties. In 2018, Bitfinex lost access to approximately $850 million entrusted to the processor Crypto Capital. This crisis led to transfers between Bitfinex and Tether's reserves, followed by an agreement of $18.5 million with the New York Attorney General in 2021. That same year, the CFTC imposed $41 million on Tether for misleading statements about the historical composition of its reserves.
Since then, Tether has published quarterly attestations of its reserves and has strengthened its operations in El Salvador, even though its legal organization remains divided among several entities. The Capstone procedure does not demonstrate a reserve deficit nor wrongdoing by Tether. However, it does bring back into focus the offshore intermediaries that still connect some crypto players to the US banking system.
-- Price
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