CoinDesk
Tether said assets it holds at Dominica-licensed EQIBank amount to less than 0.034% of its total assets. Using Tether's reported $187.75 billion in group assets, that ceiling implies exposure below roughly $64 million, though the company did not disclose an exact figure. EQIBank says about $89 million was seized from accounts tied to its U.S. payment processor, Capstone, representing roughly 80% of its monetary holdings.
Why it matters
The seizure stemmed from a U.S. civil forfeiture case involving Capstone. Prosecutors allege the payment processor misrepresented its business to banks. Court filings say Capstone used accounts at Wells Fargo and JPMorgan Chase to hold funds and move customer money. Tether said it had no knowledge of the conduct alleged by the U.S. Department of Justice.
EQIBank provided banking services to Tether, including processing wire transfers associated with USDT purchases and redemptions. The episode highlights how stablecoin operations can depend on banks and payment firms beyond the issuer itself. Disruptions at those intermediaries can expose operational and counterparty risks even when an issuer's direct exposure is limited.
Market impact
The disclosure does not indicate an immediate threat to USDT's reserves or dollar peg. Tether described its EQIBank exposure as a small share of group assets, while EQIBank's reported losses could put the lender at risk of liquidation.
For stablecoin users and markets, the key distinction is between reserve backing and the payment rails used to move funds. The seizure puts those rails under scrutiny, particularly where a bank or processor handles transfers linked to redemptions. Tether has not provided an exact exposure figure.
Frequently asked questions
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How large does Tether's EQIBank exposure appear to be?
Tether said the exposure is below 0.034% of its assets. Based on its reported $187.75 billion in group assets, that implies less than roughly $64 million, though Tether did not disclose an exact amount.
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How much money does EQIBank say was seized?
EQIBank says about $89 million was seized, representing roughly 80% of its monetary holdings.
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What role did Capstone play in the seizure?
Court filings say Capstone held funds and moved customer money through accounts at Wells Fargo and JPMorgan Chase. U.S. prosecutors allege the processor misrepresented its business to banks.
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How was EQIBank connected to Tether and USDT?
EQIBank provided banking services to Tether, including processing wire transfers associated with USDT purchases and redemptions.
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Does the disclosure indicate an immediate threat to USDT's peg?
No immediate threat to USDT's reserves or dollar peg is indicated. The episode does, however, highlight risks involving banks and payment processors used to move stablecoin-related funds.
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