A US civil forfeiture case involving about $84.2 million in bank balances and stablecoins has exposed the operational risks that can accumulate when a digital-asset company reaches dollar payment rails through multiple intermediaries.
The property is tied to Capstone Ltd., a payment processor that Dominica-licensed EQIBank used for access to US financial institutions. Prosecutors allege Capstone moved money at EQIBank’s direction while misrepresenting the nature of its business to banks. Those assertions remain allegations in a pending civil case; the court has not entered a final forfeiture judgment or found wrongdoing by Capstone, EQIBank, Tether, Bitfinex or the US financial institutions holding the accounts.
Tether confirmed to Cointelegraph that it holds assets at EQIBank. The stablecoin issuer said the balance represented less than 0.034% of group assets and that it had no knowledge of the conduct alleged against Capstone. Tether did not disclose the amount of its EQIBank balance.
What the case covers
Reports based on the forfeiture record identify approximately $79.11 million at Wells Fargo Securities, $1.86 million at Wells Fargo Bank, $2.06 million at JPMorgan Chase Bank and two USDT balances of about 1.12 million and 54,578 tokens. At USDT’s intended one-dollar value, the listed property totals roughly $84.2 million.
A federal docket for EQIBank’s related effort to recover property shows that the US government filed notice of a verified civil forfeiture complaint on July 15. The next day, US District Judge Dale A. Drozd denied EQIBank’s motion for return of property for lack of equitable jurisdiction after the separate forfeiture action had been filed. That procedural decision did not determine who ultimately owns the assets.
EQIBank has asserted that it is an innocent owner and reportedly values the affected property at about $89 million, a figure it says represents roughly 80% of its monetary holdings. The forfeiture complaint’s approximately $84.2 million total and EQIBank’s approximately $89 million claim come from different filings and have not been publicly reconciled.
The counterparty chain is the central payments issue
The case is relevant to payment providers because the exposure did not arise from a direct account between Tether and the US institutions named in the forfeiture reports. The chain described in current coverage runs from Tether to EQIBank, then through Capstone, and finally into accounts at large US financial institutions.
That structure can create several distinct dependencies. A customer may perform diligence on its immediate bank but still depend on a processor selected by that bank. Funds can then become subject to the processor’s representations, account controls and legal disputes even when the end customer has no direct contractual relationship with the processor or account-holding institution.
The amount Tether says it holds at EQIBank is small relative to its total group assets. But the case illustrates why percentage-of-balance-sheet exposure is only one measure of payment risk. A disrupted intermediary can also affect transaction continuity, redemption operations, access to records and the timing of customer funds, even when the ultimate balance is not systemically significant to the largest participant.
Controls for multi-tier stablecoin banking arrangements
For stablecoin issuers, exchanges and payment companies, the immediate lesson is to map the full route used for deposits, redemptions and treasury transfers. That inventory should identify not only the contracted bank, but also payment processors, correspondent institutions, custodians and other entities that can hold or transmit value.
Risk teams should also distinguish legal ownership from operational control. A company may regard funds as its own while an account is legally titled to an intermediary. Contracts, account records and reconciliation data need to support ownership claims before a disruption, not only after an account is frozen.
Concentration testing should extend across the chain. Two banks may appear to provide diversification while relying on the same downstream processor, correspondent or settlement venue. Conversely, one processor can concentrate exposure for several customers whose direct banking relationships look separate.
Contingency planning should cover the loss of an intermediary rather than only the failure of a bank. Practical questions include whether payment instructions can be rerouted, how quickly beneficiary and account records can be produced, which party must notify customers, and whether reserves or operating funds remain accessible during a dispute.
The case remains unresolved. Publicly reviewed material does not establish the beneficial ownership of each seized balance, Tether’s exact exposure, the complete flow of customer transactions or whether the government will ultimately retain the property. Those unanswered questions are precisely why payment firms need visibility beyond their first contractual counterparty.