Tether Discloses Limited Exposure to EQIBank Amid US Asset Seizure

Tether has disclosed that its exposure to EQIBank, a banking partner currently embroiled in a US asset seizure case, amounts to less than 0.034% of its total group assets. This statement comes as US authorities seek forfeiture of approximately $84 million linked to EQIBank's payment processor, Capstone Limited.

On September 25, Tether informed PYMNTS that the exposure figure is minimal, although it did not provide specific dollar amounts or clarify if these funds are part of the reserves backing USDT. The civil forfeiture complaint filed by the government in July lists about $83.03 million in bank balances and roughly 1.18 million USDT at two addresses, totaling around $84.2 million.

EQIBank has sought the return of the seized assets, but a court record indicates that its motion was denied, leaving the ultimate ownership of the property unresolved. The government's claim on the assets is separate from Tether's undisclosed exposure to the bank.

Tether's statement regarding its exposure is based on group assets, while its published reserves pertain to Tether International, an issuer entity. As of June 30, Tether International reported $187.75 billion in assets and $183.64 billion in liabilities, indicating a surplus of $4.11 billion. However, this does not clarify the status of Tether's funds at EQIBank as of September.

The situation raises concerns about counterparty access, particularly if the bank dispute hinders Tether's ability to meet redemption requests. While Tether has confirmed that EQIBank facilitated USDT transactions, it asserts that it had no knowledge of the alleged misconduct associated with Capstone.

This incident underscores the inherent counterparty risks within the stablecoin ecosystem, where traditional financial institutions play a crucial role in supporting blockchain assets.