Tether disclosed that the amount it has at EQIBank accounts for less than 0.034% of its total holdings. With the company reporting $187.75 billion in assets, the figure translates to an estimated $64 million, although Tether did not provide a precise dollar amount.
Background of the asset seizure
EQIBank, a Dominica-licensed offshore digital bank, relied on the U.S. payment processor Capstone to move client funds through accounts at major banks such as Wells Fargo and JPMorgan Chase. Prosecutors seized roughly $89 million from those Capstone-linked accounts, an amount said to represent about 80% of EQIBank’s monetary holdings. The seizure, filed as a civil forfeiture case, alleges that Capstone misrepresented its operations to the banks.
Role of EQIBank in USDT operations
EQIBank supplied banking services that facilitated wire transfers tied to the purchase and redemption of USDT. While the bank’s troubles highlight the broader counter-party risk faced by stablecoin issuers, Tether emphasized that its limited involvement with EQIBank does not threaten the overall stability of its reserve backing.
Impact on USDT’s dollar peg
The disclosed exposure is small enough that it does not create an immediate threat to the USDT reserve pool or its one-to-one dollar peg. Tether also noted that it had no prior knowledge of the alleged misconduct by Capstone, underscoring that the incident is isolated from the stablecoin’s core operations.
Why it matters
The episode underscores the importance of monitoring the network of banks and payment processors that underpin stablecoin ecosystems. Even a modest exposure can draw regulatory scrutiny when a counterpart faces enforcement actions. For market participants, the clarification provides reassurance that USDT’s primary reserve backing remains robust, while also highlighting the need for diversified banking relationships to mitigate future counter-party risks.
