Tether's Banking Partner Faces $84 Million Forfeiture

US federal prosecutors have filed a civil forfeiture complaint against Capstone, a Montana-based payments company, to seize $84.2 million in assets.

The funds are tied to Capstone and include $79.11 million from a Wells Fargo Securities account, $1.86 million from another Wells Fargo account, $2.06 million at JPMorgan Chase, and 1.1 million USDT split across two crypto addresses.

Capstone allegedly operated as an unlicensed money transmitter in several states while presenting itself to its banking partners as a technology services firm.

Tether confirmed it had a banking relationship with EQIBank, which used Capstone to route US dollar transfers and connect to USDT purchases and redemptions. Tether's exposure amounts to less than 0.034% of its total assets, which is roughly $64 million based on the company's reported $187.75 billion in assets as of June 30.

The important distinction here is that the forfeiture complaint does not name Tether or Bitfinex directly and a federal judge has denied EQIBank's motion to recover the funds on procedural grounds rather than on the merits of who owns what.