Tether confirms less than $63.8 million held at EQIBank after US seizures

EQIBank’s Asset Seizure and Tether’s Exposure

EQIBank, a financial institution licensed in Dominica, stated that roughly 80% of its financial assets were frozen or seized by US authorities earlier this year. In an official statement, Tether’s spokesperson placed the company’s holdings at EQIBank at “less than 0.034% of the assets of the group,” but did not disclose the precise dollar amount.

Based on Tether’s second-quarter reserves report, which listed total assets of $187.75 billion, the figure corresponds to less than $63.8 million held at EQIBank. The exposure was first made public in a report by The Information on September 24.

EQIBank revealed that its funds were placed with Capstone Ltd., a US-based payments company. Capstone maintained these assets in its own name at major US banks, including Wells Fargo and JPMorgan Chase.

EQIBank learned that the funds were frozen around April 2. Seizure warrants were reportedly issued on June 1, according to court documents related to the bank’s attempt to recover the frozen assets. Legal filings suggested the US government’s focus might have been on statements made by Capstone to the involved banks.

A Tether spokesperson emphasized in a statement that the company “had no knowledge of the conduct by Capstone alleged by the Department of Justice.”

Tether representatives stated their exposure at EQIBank is limited, adding that the group had no prior knowledge of Capstone’s alleged activities that led to the asset seizures.

Christopher Burke, co-founder of EQIBank, filed a sworn declaration in June noting that the frozen funds constituted a critical portion of the bank’s finances and said the bank could not continue operating for much longer without access to those resources.

Burke added that Dominica’s Financial Services Unit placed EQIBank under enhanced supervision on June 5, calling the step a regulator’s early move towards potentially taking over or liquidating the bank, should it fail to serve its depositors.

On July 16, Judge Dale A. Drozd of the Eastern District of California denied EQIBank’s motion to regain access to the seized funds. The court cited a lack of equitable jurisdiction after prosecutors filed a civil forfeiture case over the Capstone accounts a day earlier.

Civil Forfeiture Case and Asset Totals

The forfeiture proceedings involve approximately $83 million held by Capstone at Wells Fargo and JPMorgan Chase, as well as around 1.18 million USDT stored on the Tron blockchain, according to a court order dated September 14. The combined amount targeted by authorities is about $84.2 million.

Tether’s excess reserves at the end of June stood at $4.11 billion, down from $8.23 billion three months earlier, a decline first reported by Unchained in August.

Mini dictionary: EQIBank, established in 2015, is a digital bank licensed in Dominica, providing global corporate and private banking services with a focus on digital asset support.