Tether Confirms EQIBank Exposure Amid Bank's Liquidation Woes

Tether, the company behind the USDT stablecoin, has confirmed that it has funds stuck at EQIBank, an offshore bank in Dominica. The bank is facing possible liquidation after US authorities seized most of its cash, leaving it with about 20% of its holdings.

The exposure to EQIBank is reportedly tiny, less than 0.034% of Tether's total assets, or under $64 million based on its latest quarterly reserves report. However, the situation highlights the risks associated with counterparty risk in the stablecoin market.

EQIBank has warned that it could be forced into liquidation due to the seizure of about 80% of its cash holdings by US authorities. The bank is challenging the seizure in a California federal court and seeking to recover the funds.