Tether says exposure to seized-from bank was just 0.034%
The stablecoin issuer confirmed limited assets at EQIBank after US authorities froze $84 million linked to a payments processor.
The short answer
Tether said it had limited exposure to EQIBank, which allegedly directed a payments company called Capstone. US prosecutors froze about $84 million in Capstone's accounts. Tether confirmed it was an EQIBank customer but said the bank held just 0.034% of its total assets.
What happened
US authorities froze funds tied to Capstone, a payments processor that allegedly moved money on behalf of EQIBank. Tether confirmed it held assets at EQIBank and used the bank for USDT purchases and redemptions but said the exposure was minimal. A company spokesperson told Cointelegraph that Tether had no knowledge of any alleged misconduct by Capstone or EQIBank.
Court filings identified roughly $83 million in frozen bank accounts along with approximately 1.18 million USDT from cryptocurrency addresses. EQIBank separately described the affected amount as roughly $89 million. The Justice Department alleged that Capstone was unlicensed and had made payments to hundreds of individuals and entities on behalf of Tether and Bitfinex.
Why it matters
The incident highlights counterparty risk in stablecoin infrastructure. While USDT moves across blockchains, the fiat reserves backing the token still flow through traditional financial institutions including banks, payment processors and custodians. Assets held at these intermediaries can be frozen or seized by courts, creating exposure even when blockchain systems operate normally.
Tether said the amount held at EQIBank represented 0.034% of the group's total assets. Based on Tether's latest reported asset base of roughly $187.75 billion, that percentage implies a ceiling below approximately $64 million. While the exposure is small relative to Tether's overall balance sheet, the situation underscores why the legal position and quality of banking partners matter to stablecoin issuers.
What is still unclear
- No finding has established that Tether participated in the alleged misconduct, and the company has not disclosed the actual dollar amount held at EQIBank.
Questions readers ask
How much of Tether's assets were at EQIBank?
Tether said the amount represented 0.034% of the group's total assets. Based on Tether's reported asset base of roughly $187.75 billion, that implies a ceiling below approximately $64 million, though Tether has not disclosed the actual figure.
What did US authorities freeze?
US prosecutors froze about $84 million in Capstone's bank accounts, along with approximately 1.18 million USDT from cryptocurrency addresses. EQIBank separately described the affected amount as roughly $89 million.
Did Tether know about the alleged misconduct?
A Tether spokesperson said the company had no knowledge of any alleged conduct by Capstone. No finding has established that Tether participated in the misconduct.
Why does stablecoin banking matter?
While USDT operates on blockchains, the fiat reserves behind it must flow through traditional financial institutions where accounts can be frozen and assets seized by courts. This creates counterparty risk regardless of how well blockchain systems function.