Tether's EQIBank Exposure Sparks Concern Over USDT Redemptions

Tether's exposure to EQIBank has raised questions about the stablecoin issuer's access to assets that might back USDT redemptions. According to court records, a US asset seizure involving payment processor Capstone Limited lists about $83.03 million in three bank balances and roughly 1.18 million USDT at two addresses.

The combined value of these assets is approximately $84.2 million. However, the court record does not identify the listed property as Tether's. EQIBank sought the return of seized property in a separate but related action, but its motion was denied.

Tether has disclosed exposure to EQIBank, stating that it is less than 0.034% of the Tether group's assets. However, the stablecoin issuer did not provide a dollar balance or indicate whether the money is part of USDT reserves. This leaves uncertainty about the link between Tether's EQIBank exposure and its USDT reserve funds.

The issue at hand is whether Tether's EQIBank exposure involves assets needed for USDT redemptions. If the seized assets belong to Tether, it could potentially impact the stablecoin issuer's ability to meet redemption requests.