American prosecutors have seized roughly $84.2M that belonged to EQIBank, a digital bank licensed in Dominica that handled money for Tether, the company behind the world's largest stablecoin. A stablecoin is a token meant to hold a fixed value, usually one US dollar, and Tether's USDT is the biggest of them.
The money was not taken from the bank directly. It sat in accounts controlled by Capstone, a Montana-registered payments company that moved money between EQIBank and the American banking system, and the Justice Department filed a civil forfeiture complaint in the Eastern District of California to take it. The itemised total comes to $79.11M from a Wells Fargo Securities account, $1.86M from Wells Fargo Bank, $2.06M from JPMorgan Chase, and about 1.18M USDT tokens from two cryptocurrency addresses.
Civil forfeiture is worth explaining because it shapes everything that follows. The government proceeds against the money rather than against a person, arguing the funds themselves were used in a crime, which means no one has to be convicted, or even charged, for the seizure to stand.
What prosecutors allege is that Capstone operated as an unlicensed money transmitter across several states, and told the banks holding its accounts that it was an information technology company rather than a money services business. Kotaro Shimogori and Mary Jeanne Thompson are named as Capstone's owners, and the company's lawyers deny wrongdoing, say it cooperated with investigators and intend to seek dismissal.
The Bank Says Most Of It Is Gone
EQIBank operates under Dominica's Offshore Banking Act and answers to the island's Financial Services Unit, a regulator in a country of around 70,000 people. The bank puts the frozen amount at roughly $89M, a larger figure than the complaint itemises, and says that represents about 80% of its monetary holdings. It warned on 9 September that continuing to lose access to the money could force it into liquidation, and its attempts to recover the property have not succeeded.
That is the practical shape of the story. A seizure aimed at a payment processor has taken most of the working capital out of the bank that processor served, and the bank's own customers have no part in the case against Capstone.
Tether Puts Its Exposure At Under 0.034%
Tether confirmed the banking relationship and said EQIBank had handled wire transfers for customers buying and redeeming its USDT token. Its statement put the money held there at less than 0.034% of group assets and added that the company "had no knowledge of the conduct by Capstone alleged by the Department of Justice." Tether has not been accused of anything in the complaint.
The percentage is doing a lot of work in that sentence. Applied to the roughly $187.75B of assets Tether reports, 0.034% comes to about $64M, a figure Tether itself did not publish and which is immaterial to a company of that size and close to fatal for a bank of EQIBank's.
The number also measures only one thing. It describes how much money was sitting there, not how much of Tether's ability to move dollars in and out ran through that relationship, and those are different exposures.
Why A $187B Issuer Banks In Dominica
The arrangement looks strange until the banking problem behind it is clear. A stablecoin issuer promises that each token can be exchanged for a dollar, which means it needs real bank accounts to take dollars in when someone buys and send dollars out when someone redeems. That requires a bank willing to hold the account.
Large American and European banks have mostly been unwilling to take that business, citing the compliance burden, which pushed issuers towards smaller institutions in jurisdictions that would have them. A bank licensed in a Caribbean state ends up serving a company holding more assets than many national banking systems.
Capstone occupied the gap between the two. An offshore bank still needs to reach dollars held in American institutions, and a payments company registered in Montana with accounts at Wells Fargo and JPMorgan provided that bridge, which is precisely the structure the complaint is built around.
Tether Is Building A US Structure
None of this is happening while Tether stands still, because American law changed last year. The GENIUS Act, enacted in July 2025, sets the conditions for issuing a stablecoin in the United States. It requires audited reserve reporting rather than the limited attestations issuers have published, constrains what the reserves can be held in, and imposes anti-money-laundering and sanctions controls, with its operative provisions starting 18 months after enactment or 120 days after final rules, whichever comes first.
Tether's answer was to build something separate. It launched USAT in January as a United States token issued through a bank regulated by the Office of the Comptroller of the Currency, with a third-party custodian holding the reserves, and hired KPMG to carry out a full audit rather than the limited checks it had used before.
USDT itself, with around $183.3B in circulation, remains the offshore product. The company is assembling a regulated American structure alongside an international one that still depends on arrangements like the one just seized.
The Case Will Outlast The Headlines
Civil forfeiture cases move slowly, and the money stays where it is while they do. Capstone's owners intend to contest the complaint, EQIBank has so far failed to get its property released, and Dominica's Financial Services Unit has said nothing publicly about what it will do with a licensed bank missing most of its liquid assets.
For Tether the loss is a rounding error against its balance sheet, and the more consequential detail is which other institutions are willing to hold the accounts that keep dollars flowing to a token with $183.3B outstanding. That question gets answered through banking relationships that are rarely announced, and usually only becomes visible, as it did here, when one of them stops working.
