Tether’s Funds Frozen at Offshore Partner EQIBank Amid US Seizure

Tether (USDT) disclosed that a portion of its reserves is held at EQIBank, a digital bank licensed in Dominica, which is currently facing liquidation risk after a United States asset seizure.

Background on EQIBank’s Situation

EQIBank is seeking to recover approximately $89 million that was seized by US authorities from accounts linked to payment processor Capstone Ltd. The seized funds were held at Wells Fargo and JPMorgan Chase, representing roughly 80 % of EQIBank’s total monetary holdings. The bank has warned that this could lead to liquidation.

Tether’s Exposure

Tether stated that its exposure to EQIBank is limited to less than 0.034 % of its total assets. The company has not disclosed the exact dollar amount of the frozen funds nor directly confirmed the report.

Implications for USDT

The incident raises broader concerns about how much of Tether’s reserves are held in offshore banks, as concentration risk at smaller institutions has previously caused deposit access issues for other firms. Tether’s most recent attestation shows total reserves near $190 billion, primarily in U.S. Treasuries, but the share held in offshore banks remains unclear.

Next Steps

The legal case concerning the seized funds is ongoing in California. Further disclosure from Tether regarding its offshore reserve composition would clarify the potential impact on USDT stability.