Tether disclosed that its relationship with offshore bank EQIBank accounts for a fraction of its balance sheet, a move aimed at calming concerns after U.S. prosecutors seized assets tied to the bank’s payment processor.

Tether’s disclosed exposure

The stablecoin issuer calculated that its holdings with EQIBank amount to less than 0.034% of its total group assets. Based on the most recent asset report of about $187.75 billion, that percentage translates to a ceiling of roughly $64 million. Tether has not released the precise figure, but it confirmed the exposure is limited relative to its overall reserve pool.

Details of the U.S. seizure

Federal investigators targeted Capstone Limited, a payment processor that EQIBank employs to move funds through U.S. banking channels. Court documents cite approximately $83 million in bank accounts and about 1.18 million USDT linked to cryptocurrency addresses as subject to forfeiture. EQIBank independently estimated the affected sum at around $89 million and warned that loss of access could strain its operations. Tether stated it had no prior knowledge of the alleged misconduct and that no evidence shows it participated in any wrongdoing.

Implications for stablecoin reserves

The case underscores that, while USDT can settle on public blockchains in seconds, the fiat reserves backing the token still rely on traditional financial infrastructure. Banks, custodians and payment processors remain points of vulnerability; accounts can be frozen, and assets can be seized through legal action. Tether has been diversifying its reserve composition, emphasizing highly liquid U.S. Treasury bills and expanding its network of banking partners to mitigate such risks.

Why it matters

The episode illustrates that stablecoin issuers are not insulated from conventional financial regulation. Even a modest exposure can attract regulatory scrutiny and affect confidence in the token’s backing. For market participants, the incident serves as a reminder that the stability of algorithmic and fiat-backed tokens is intertwined with the health and legal standing of their off-chain counterparties.