Tether, the company that issues the USDT stablecoin, has confirmed that some of its funds are stuck at EQIBank, a Dominica-licensed Caribbean digital bank that says it may be forced into liquidation after U.S. authorities seized money held through its payment processor, Capstone Ltd. Tether says the amount is less than 0.034% of its group assets and that it was unaware of the conduct federal prosecutors allege against Capstone.
The exposure was first reported by The Information on September 24. In a written response to the publication, Tether confirmed that EQIBank handled wire transfers linked to purchases and redemptions of USDT. “Tether had no knowledge of the conduct by Capstone alleged by the Department of Justice,” a Tether spokesperson said. The company has not disclosed the exact dollar amount held at the bank.
What the U.S. Government Is Seeking to Forfeit
The U.S. Department of Justice (DOJ) filed a civil forfeiture complaint on July 15, 2026, in the U.S. District Court for the Eastern District of California. Civil forfeiture is a lawsuit brought against property rather than a person. The government asks a court to transfer ownership of assets it alleges are connected to unlawful activity, and it does not need a criminal conviction to do so.
The property listed in a September 14 court order includes:
- About $79.11 million from a Wells Fargo Securities account held in Capstone’s name
- About $1.86 million from a Wells Fargo Bank account
- About $2.06 million from a JPMorgan Chase Bank account
- About 1.12 million USDT held at one crypto address
- 54,578.45 USDT held at a second address
Valuing USDT at its $1 peg, the listed property totals roughly $84.2 million. EQIBank has put its own loss at about $89 million. The two figures come from separate filings, and no court has reconciled them.
The Information reported that EQIBank relied on Capstone, which prosecutors allege misrepresented itself to U.S. banks. Public summaries of the complaint also describe Capstone as a processor that executed transfers directed by EQIBank, including transfers connected to Tether and its sister exchange Bitfinex, through accounts at Wells Fargo and JPMorgan Chase. These are allegations in a pending civil case. No court has made findings of wrongdoing against any party.
How the Court Case Has Unfolded
EQIBank moved first. On June 29, 2026, it filed a motion under Rule 41(g) of the Federal Rules of Criminal Procedure, which allows a person to ask a federal court to return seized property. It sought the return of about $89 million.
The government filed its forfeiture complaint two weeks later. At a hearing on July 16, U.S. District Judge Dale A. Drozd denied EQIBank’s motion. According to court records, the judge did not decide who owns the money. He held that once a civil forfeiture case is pending, the court could not use its equitable powers to return the funds through the Rule 41(g) route.
On September 9, EQIBank warned that losing roughly 80% of its monetary holdings could force it into liquidation, OffshoreAlert reported. In court papers cited by The Information, the bank argued it is an innocent owner and that the government had not named it as a target of the investigation. “EQIBank is not a rogue bank,” the filing said.
Under federal forfeiture law, an innocent owner is a claimant who shows it did not know of, or did not consent to, the conduct that made the property subject to forfeiture. Prosecutors have not accepted that description.
On September 14, the court ordered the government to publish notice of the action for 30 consecutive days on the official federal forfeiture website. Anyone claiming an interest must follow Supplemental Rule G of the Supplemental Rules for Admiralty or Maritime Claims and Asset Forfeiture Actions. On September 16, Judge Drozd assigned EQIBank’s motion and the forfeiture action to the same district and magistrate judges as related cases, while noting that the reassignment did not consolidate them.
Who EQIBank and Capstone Are
EQIBank is a digital bank licensed in Dominica and supervised by the Financial Services Unit of the Commonwealth of Dominica. It launched in 2015 and is led by chief executive Jason Blick. It offers multi-currency accounts along with crypto trading and custody services.
Capstone Ltd. is the payment processor whose U.S. bank and brokerage accounts were the target of the seizure. Court summaries describe it as the channel through which EQIBank’s dollars were held at Wells Fargo and JPMorgan Chase.
What Tether’s Reserve Figures Show
Tether publishes quarterly attestations, which are independent accountant reports that check an issuer’s assets and liabilities on a single date. Its second-quarter attestation, prepared by accounting firm BDO and released on July 31, 2026, reported the following as of June 30:
- Total assets of $187,751,426,411
- Total liabilities of $183,641,897,215
- Excess reserves of $4,109,529,196
- About $184.6 billion in USDT issued
- U.S. Treasury bills worth about $114.96 billion
Applied to those assets, Tether’s 0.034% ceiling works out to about $63.8 million. That is an upper limit, not a disclosed balance, and the actual figure could be lower.
Tether’s excess reserves, the cushion of assets above what it owes token holders, had already fallen from $8.23 billion at the end of March to $4.11 billion at the end of June. Even at the upper bound, the EQIBank exposure equals about 1.6% of that cushion.
On August 13, 2026, Tether said KPMG U.S. issued an unqualified opinion on the 2025 financial statements of Tether International, S.A. de C.V., showing reserves exceeding liabilities by $6.814 billion as of December 31, 2025. That audit covers a period before the June figures and does not publicly address the EQIBank relationship.
Tether has said the EQIBank balance is limited relative to group assets. It has not published a separate quote stating that recovery depends on liquidation. USDT continued to trade close to its $1 peg after the report, near $0.9997 in Asian hours on September 25.
Why the Bitfinex Link Draws Scrutiny
Bitfinex is a crypto exchange that operates under common ownership with Tether. In February 2021, both companies agreed to pay $18.5 million and stop serving New York customers to settle an investigation by the New York Attorney General (NYAG), which alleged the firms hid about $850 million in losses and misrepresented USDT’s backing. Neither company admitted wrongdoing.
That history explains why any new U.S. banking case naming both firms draws close attention from regulators and market participants, even when the dollar amount is small relative to Tether’s balance sheet.
What Comes Next
The next steps are procedural. Under Rule G, claimants must file claims within set deadlines and then answer the government’s complaint within 21 days of filing a claim. Those filings will decide whether EQIBank can establish innocent ownership or whether the United States keeps the property.
Several facts remain undisclosed, including Tether’s exact balance at EQIBank, how much of the seized money belongs to EQIBank, Tether, or other clients, and the full details of the government’s allegations against Capstone. No final forfeiture judgment has been entered.
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