U.S. seizes $84 million tied to a Tether banking partner; Tether says its exposure is under 0.034%

U.S. prosecutors are seeking to keep about $84.2 million seized from accounts of Capstone Ltd., a U.S. payment processor that moved dollars for EQIBank, a Dominica-licensed bank that has handled wire transfers for buyers and redeemers of Tether's USDT stablecoin. The Financial Times reported the seizure on Friday. Tether confirmed it has funds at EQIBank but said they amount to "less than 0.034% of the assets of the group," crypto.news reported.

What the court papers show

The case is a civil forfeiture action in federal court in the Eastern District of California. According to filings summarised by crypto.news and The Crypto Times:

• A Sept. 14 court order lists about $79.11 million taken from a Wells Fargo Securities account in Capstone's name, $1.86 million from a Wells Fargo Bank account and $2.06 million from a JPMorgan Chase account.
• It also lists 1.12 million USDT and 54,578.45 USDT seized from crypto addresses.
• Prosecutors filed the forfeiture complaint on July 15. District Judge Dale A. Drozd denied EQIBank's motion to have the money returned on July 16.

The pieces add up. The three bank accounts come to $83.03 million, and the roughly 1.17 million USDT, a token designed to trade at $1, brings the total to about $84.2 million, the figure in the complaint.

Prosecutors allege Capstone misrepresented itself to U.S. banks, according to The Crypto Times. These are allegations in a pending civil case, and no court has found wrongdoing by any party. EQIBank, which has not been named as a target, argues it is an innocent owner of the money. It puts the amount seized at about $89 million, roughly 80% of its cash, and warned on Sept. 9 that it could be forced into liquidation, Crypto Briefing reported.

What 0.034% means in dollars

Tether did not give a dollar figure. Using the $187.75 billion in total group assets it reported as of June 30, cited by crypto.news, 0.034% works out to a ceiling of about $63.8 million. Even if every dollar were lost, that is a rounding error against Tether's reserves, and nothing in the filings suggests a threat to USDT's backing. A Tether spokesperson said the company "had no knowledge of the conduct by Capstone alleged by the Department of Justice."

Who it actually hits

The more useful lesson is about access, not solvency. EQIBank's role was to process wires for people buying and redeeming USDT, and it reached U.S. banks through Capstone's accounts at Wells Fargo and JPMorgan. With those accounts frozen since before June 29, when EQIBank first asked for the money back, that route has been shut. The customers who relied on it, such as trading desks and businesses that settle cross-border payments in USDT, have to find another way in or out of dollars. That costs time and fees even when the stablecoin itself holds its peg.

The case lands as U.S. regulators write the rules for where stablecoins meet the banking system: the Federal Reserve this week proposed GENIUS Act rules for bank-owned stablecoin issuers, which we covered here. The forfeiture case continues; under the Sept. 14 order, notice of the forfeiture must be published on a federal government website for 30 days.

Sources: Financial Times; crypto.news; The Crypto Times; Crypto Briefing; court filings as reported by those outlets. Totals and the dollar ceiling are Chronicle calculations. This is market information, not investment advice.