Tether (USDT) is dealing with trapped funds at EQIBank, an offshore banking partner currently confronting liquidation risks following a United States asset seizure.
According to Tether, this exposure is restricted to under 0.034% of its overall assets. While the company has not confirmed the report or provided a specific dollar amount, the situation prompts inquiries regarding the total volume of funds Tether maintains offshore.
Why EQIBank Is at Risk
The exposure was initially brought to light by The Information. EQIBank, which operates as a licensed digital bank in Dominica, is currently working to retrieve approximately $89 million. This sum was confiscated by US authorities from accounts associated with Capstone Ltd., a payment processor.
According to the bank’s legal filings, the frozen capital was held at JPMorgan Chase and Wells Fargo. The enforcement action resulted in the loss of roughly 80% of EQIBank’s overall monetary reserves.
Because of this massive impact, EQIBank has cautioned that it faces the threat of liquidation, creating the environment where Tether’s deposits became stuck.
The Real Question Is Concentration
The core issue is not a single bank holding 0.034% of Tether’s total assets. Instead, the unanswered question involves the exact amount of Tether reserves kept across offshore banks in total. Revealing that number would clarify the true exposure beyond assets like money market funds and US Treasuries.
Historically, heavy deposit concentration in smaller financial institutions has triggered bank runs, such as the 2023 collapse of Silicon Valley Bank that cut off deposit access for multiple US firms.
Furthermore, Tether’s reserve buffer has decreased even after completing a successful 2025 audit. This introduces a secondary concern: whether the company could successfully manage multiple offshore shocks of this nature simultaneously.
Based on Tether’s latest attestation, total reserves sit near $190 billion, with the vast majority maintained in US Treasuries. The exact portion of that total allocated to offshore banks remains an unanswered detail from this incident.
Legal proceedings concerning EQIBank’s seized funds are ongoing in California. Whether this event remains a minor footnote will depend on if Tether chooses to detail its offshore exposure.
Frequently Asked Questions
Why are Tether’s funds frozen at EQIBank?
Tether’s funds are impacted because EQIBank is facing liquidation threats following a US asset seizure that swept up approximately $89 million from accounts tied to a payment processor named Capstone Ltd.
How much of Tether’s assets are exposed?
Tether has stated that the exposure accounts for less than 0.034% of its total assets, though it has not shared a specific dollar figure.
What is EQIBank?
EQIBank is a digital bank licensed in Dominica that stored frozen funds at Wells Fargo and JPMorgan Chase before US authorities seized them.
Where are the majority of Tether’s reserves held?
Tether’s most recent attestation shows total reserves close to $190 billion, with the majority kept in US Treasuries.
