The DOJ is seeking to seize $84.2 million linked to Capstone Ltd., accused of facilitating transactions for Tether without proper licensing.
US Government Moves to Seize Funds Associated with Tether
The U.S. Department of Justice has launched a civil forfeiture action seeking to confiscate $84.2 million linked to Capstone Ltd., a payments firm accused of facilitating transactions for Tether without the necessary licenses.
Filed on July 15 in the Eastern District of California, the complaint highlights Capstone's alleged operation as an unlicensed money transmitter across at least six states, while presenting itself to banks as a conventional IT services provider. The firm is owned by Kotaro Shimogori and Mary Jeanne Thompson, who are named in the complaint, which follows an FBI raid on a Sacramento residence.
As of mid-September, a substantial portion of the targeted funds, approximately $79.11 million, is located in a Wells Fargo Securities account. Additional amounts include $2.06 million at JPMorgan Chase, $1.86 million in another Wells Fargo account, and over $1.1 million across two USDT wallets, Tether's stablecoin.
EQIBank, a digital bank from Dominica linked to Capstone, has been identified as the entity managing these wire transfers. The bank warned that losing these funds, which constitute about 80% of its total assets, could threaten its viability.
Tether has acknowledged that EQIBank facilitated its transactions but claimed ignorance of any misconduct associated with Capstone. A spokesperson for Tether noted that its exposure is minimal, representing less than 0.034% of its reported $187.75 billion in assets as of the end of Q2.
This is not Tether's first encounter with legal scrutiny; in 2021, the company and its sister firm Bitfinex settled with the New York Attorney General over misleading claims regarding USDT's backing, resulting in an $18.5 million penalty.
Capstone and EQIBank are pursuing an innocent-owner defense regarding the seized assets. Under the rules for forfeiture cases, any claimants have 21 days to respond to the government's complaint after it is formally filed with the court.
