The USDT issuer said assets it holds at EQIBank represent less than 0.034% of total group assets and that it had no knowledge of the conduct prosecutors have alleged against Capstone Limited, the Montana-based payments company at the center of the case.
The percentage is small relative to Tether’s balance sheet. Based on the company’s latest disclosed total assets of $187.75 billion, the stated ceiling would put its EQIBank exposure below approximately $63.8 million. Tether has not disclosed the exact amount or how much of it is currently inaccessible.
What Did U.S. Prosecutors Seize?
The civil forfeiture case was filed in the U.S. District Court for the Eastern District of California on July 15. A September 14 court order lists approximately $79.11 million held in a Wells Fargo Securities account in Capstone’s name, another $1.86 million at Wells Fargo, $2.06 million at JPMorgan Chase and approximately 1.18 million USDT held across two cryptocurrency addresses.
Together, the assets are worth roughly $84.2 million. Prosecutors allege that Capstone operated as an unlicensed money transmitter and misrepresented the nature of its business to U.S. banks while moving funds for third parties.
The complaint describes activity involving two unnamed cryptocurrency businesses and a bank in Dominica. Tether and Bitfinex have confirmed they were customers of EQIBank and said they had no knowledge of Capstone’s alleged conduct.
The allegations remain unresolved. A civil forfeiture complaint seeks ownership of property allegedly connected to unlawful activity and does not by itself establish criminal liability for every company whose funds or transactions passed through the payment chain. Capstone has denied wrongdoing.
How Large Is Tether’s Exposure?
The direct balance-sheet risk appears limited based on Tether’s disclosure. The company reported $187.75 billion in total assets and $183.64 billion in liabilities as of June 30, leaving an excess asset buffer of approximately $4.11 billion.
Even if Tether’s EQIBank position were close to the 0.034% ceiling, it would amount to less than 1.6% of that June surplus. USDT circulation was approximately $184.6 billion at quarter-end and its market capitalization remains around $184 billion.
The more immediate uncertainty sits with EQIBank. The bank has said approximately $89 million seized by U.S. authorities represented about 80% of its monetary assets and has warned in court that losing permanent access to the money could expose it to liquidation risk. Tether’s funds held at EQIBank could therefore remain inaccessible while the ownership dispute proceeds even if they ultimately prove recoverable.
Investor Takeaway
The reported exposure is too small, based on Tether’s latest balance sheet, to imply an immediate USDT solvency problem. The more relevant risk is operational: stablecoin issuers still depend on banks and payment intermediaries to move dollars, process redemptions and connect blockchain tokens with the conventional financial system. Assets can remain fully owned yet temporarily unavailable when a banking partner becomes subject to seizure or liquidation proceedings.
Why Does the EQIBank Case Matter for USDT?
The episode arrives at an awkward time for Tether because the company has repeatedly argued that forcing stablecoin issuers to keep large portions of their reserves in commercial banks can create additional counterparty risk.
CEO Paolo Ardoino recently cited that concern in explaining why Tether did not seek authorization for USDT under Europe’s MiCA framework, where bank-deposit reserve requirements have been one of the company’s main objections. Tether instead keeps much of its reserve portfolio in short-term U.S. government securities and repurchase agreements.
The EQIBank case illustrates the distinction between reserve composition and reserve accessibility. Treasury bills may carry low credit risk, but stablecoin operators still require banking relationships for fiat settlement, redemptions and cash transfers. Problems at even a relatively small banking counterparty can therefore interrupt access without materially changing the value of the issuer’s wider portfolio.
What Should USDT Holders Watch Next?
The central questions are how much of Tether’s EQIBank position is actually frozen, whether the bank recovers the assets it says belong to it and whether Tether needs to replace any payment or banking infrastructure connected to the relationship.
For now, Tether’s disclosed exposure is small relative to both its assets and reserve surplus, and there has been no comparable sign of stress in USDT’s dollar peg. The case nevertheless provides a reminder that stablecoin reserve risk is not limited to what assets an issuer owns. Where those assets are held, which intermediaries control access to them and whether dollars can move when holders demand redemption can matter just as much.