Tether has acknowledged that some of its funds are trapped at EQIBank, an offshore banking partner that has warned it could be pushed into liquidation after a major US asset seizure. The stablecoin issuer said its exposure to the bank is limited to less than 0.034% of total assets, but it did not provide a dollar figure.
The issue centers on EQIBank, a Dominica-licensed digital bank that is trying to recover about $89 million seized by US authorities from accounts tied to payment processor Capstone Ltd. According to the bank, that seizure removed roughly 80% of its monetary holdings.
Tether confirms limited exposure
The disclosure followed questions about whether trouble at EQIBank could create broader risk for USDT. Tether’s position is that the amount involved is small relative to its balance sheet, with exposure below 0.034% of total assets.
The company did not directly confirm the underlying report in full and did not identify the exact amount affected. Even so, the statement indicates that any funds caught up at EQIBank represent a very small share of Tether’s overall assets.
Why EQIBank is under pressure
EQIBank said it is seeking to recover around $89 million in funds that were seized by US authorities. The money was taken from accounts linked to Capstone Ltd., a payment processor named in the case.
The bank has said the seizure wiped out about 80% of its total monetary holdings. On that basis, it warned that it may face liquidation risk if the matter is not resolved in its favor.
The bigger question is offshore reserve concentration
The immediate exposure to a single bank is not, by itself, the main unresolved issue raised by the episode. The larger question is how much of Tether’s reserves are placed with offshore banks in total, and how diversified those relationships are.
The extracted figures leave that point open. Tether’s reserves are described as being near $190 billion overall, with most of them held in US Treasuries, but the size of the offshore portion was not disclosed. That means outside observers cannot yet judge how vulnerable the reserve structure would be to stress at multiple smaller banking partners at the same time.
The article notes that reserve concentration at smaller banks has contributed to runs in the past. In that context, the EQIBank situation has renewed scrutiny not because of the stated size of this single exposure, but because it highlights unanswered questions about the broader reserve map.
What happens next
The legal fight over the seized funds is continuing in California. For now, the confirmed facts are that EQIBank is contesting the seizure, Tether says its exposure is below 0.034% of assets, and the exact dollar amount has not been made public.
The next meaningful development will likely be either progress in the California case or any additional disclosure from Tether about how much of its reserves are held through offshore banks and whether those positions are being reduced. Until then, the incident remains a contained but closely watched test of reserve transparency.
Source: beincrypto.com