U.S. authorities have seized $84.2 million in assets from Capstone Limited, linked to Tether's banking partner EQIBank, as part of a civil case.
U.S. authorities have seized approximately $84.2 million in assets tied to Capstone Limited, a payment processing firm that facilitated access to the U.S. banking system for EQIBank, a Dominica-registered bank known to service Tether. This action follows reports revealing Tether's reliance on EQIBank for processing transactions related to its stablecoin.
The seized assets include $79.1 million from Capstone’s account at Wells Fargo Securities, $1.86 million at Wells Fargo Bank, and $2.06 million at JPMorgan Chase, along with around 1.18 million USDT from two addresses. A federal court in California is overseeing the civil case, and while the prosecution seeks forfeiture of these assets, the final decision on ownership is still pending.
A notice regarding the case was mandated by the court to be published on forfeiture.gov for 30 days, inviting claims from interested parties.
EQIBank's Legal Challenge
In response to the seizure, EQIBank has filed a motion in federal court to reclaim the funds, asserting that the assets, valued around $89 million, represent about 80% of its cash reserves. The bank has cautioned that losing these funds could jeopardize its operations.
U.S. prosecutors have also initiated a civil suit aiming to forfeit the assets linked to Capstone. However, a federal judge recently denied EQIBank’s motion to return the seized funds, stating that the court lacked jurisdiction to address the bank's claim following the separate forfeiture suit.
Additionally, prosecutors allege that Capstone misrepresented itself to banks, claiming to be an IT company while facilitating money transfers for financial and cryptocurrency clients. This allegation is part of the prosecution's stance and has not been legally established.
Tether's Limited Exposure
Tether has indicated that its exposure to the seized assets is minimal, representing less than 0.034% of its total assets. The issuer of USDT has stated it was unaware of Capstone's alleged illegal activities. According to Tether's latest audit, the group's total assets amount to $187.75 billion, with a surplus of $4.11 billion over liabilities.
This incident pertains specifically to one of Tether's banking partners and does not impact the overall backing of its USDT supply. Tether has previously faced scrutiny regarding its payment intermediaries, including a notable case with Bitfinex that was settled for $18.5 million in 2021 without any admission of wrongdoing.
