The U.S. government seized bank accounts associated with Capstone Ltd., a payment processor that handled transactions for EQIBank, a digital bank licensed in Dominica. This action led to a portion of Tether's reserves, specifically less than 0.034% of its total assets, becoming frozen at EQIBank. While this amount is small in relation to Tether's overall reserves, which stand at around $190 billion, the incident has highlighted risks associated with offshore counterparties and the transparency of Tether's reserve holdings.
EQIBank itself is trying to recover approximately $89 million (€78.3 million) that was frozen in accounts at Wells Fargo and JPMorgan Chase, linked to Capstone Ltd. This seizure impacted about 80% of EQIBank's total cash holdings, leading the bank to warn of potential liquidation. The case, which is ongoing in California, raises broader questions about the extent of Tether's USDT reserves held outside the U.S. and the potential for counterparty risk even with smaller financial institutions.
Separately, Tether has been involved in other freezing actions. In April 2026, the U.S. Treasury Department announced the freezing of $344 million in USDT linked to Iranian financial networks as part of its "Economic Fury" campaign. This action followed Tether blacklisting two blockchain addresses on Tron holding the substantial amount. Additionally, in September 2026, the SDNY U.S. Attorney's Office filed a civil forfeiture complaint to seize approximately $61 million in USDT funds, alleging they were proceeds from black-market sales of sanctioned Iranian crude oil laundered through Hong Kong-incorporated firms. The stablecoin issuer froze seven of the ten implicated wallets on June 15, 2025, and the remaining three on July 26, 2025. These events underscore the increasing scrutiny and enforcement actions by U.S. authorities against the use of stablecoins in illicit finance and the impact on stablecoin issuers.
