Tether says EQIBank exposure is below 0.034% of group assets

Tether says its EQIBank funds are a tiny slice of group assets

Tether says the assets it holds at EQIBank amount to less than 0.034% of its group assets. A Tether spokesperson gave that percentage to CoinDesk but did not give a dollar amount.

The statement followed a report by The Information that some of the company's funds were stuck at the offshore bank. According to that report, the bank faces the risk of liquidation after a U.S. asset seizure.

Tether issues USDT, a stablecoin. A stablecoin is a crypto token designed to hold a steady value, usually one U.S. dollar per token. Tether also publishes attestations, which are reports about the assets it holds.

How the reported percentage translates into dollars

• Tether's exposure to EQIBank is below 0.034% of group assets, according to the spokesperson quoted by CoinDesk.
• Tether did not disclose a dollar figure for that exposure.
• Applied to the $187.75 billion of assets in Tether International's June 30 attestation, 0.034% works out to about $63.8 million. That is a calculation, not a number confirmed by Tether.
• The Information reporter Yueqi Yang described "some funds stuck" at EQIBank in her Sept. 24 report.
• EQIBank says it is licensed and regulated by Dominica's Financial Services Unit.

What the Sept. 14 court order does and does not say

A Sept. 14 federal court order in a related forfeiture proceeding lists seized accounts held in Capstone Limited's name at Wells Fargo and JPMorgan Chase. The list includes about $79.1 million at Wells Fargo Securities.

The order directs that notice be published so potential claimants can come forward. It does not decide liability, and it does not establish Tether's exposure.

A Tether spokesperson told CoinDesk: "Tether had no knowledge of the conduct by Capstone alleged by the Department of Justice."

Where MiCA and the GENIUS Act draw the lines

Europe's MiCA rules and the U.S. GENIUS Act both limit where regulated stablecoin reserves can be kept. Those rules deal with how banks are chosen and how assets are held in custody. The supplied material does not show that following them would have prevented this situation. That would depend in part on whether the affected money was reserve backing and how the accounts were structured.

Under MiCA Article 54, issuers of e-money tokens covered by its safeguarding rules must keep at least 30% of the money they receive in separate accounts at credit institutions. MiCA defines those institutions using EU banking authorization, so a Dominica banking license on its own would not meet that definition.

MiCA also places custody safeguards on electronic money institutions that issue significant e-money tokens. Through Articles 58 and 37, these include checking custodians carefully, monitoring their financial condition, and holding reserve funds in accounts that are identifiable and separate in the issuer's name.

The GENIUS Act takes a different approach. Its list of allowed reserves for permitted U.S. issuers includes withdrawable deposits at insured depository institutions and short-dated Treasuries. Section 10 limits reserve-custody services to providers under specified federal or state supervision and generally requires customer assets to be accounted for separately from the custodian's assets.

The law does, however, exempt cash held as a bank deposit liability from the requirement to keep that cash separate from the bank's property. A deposit is therefore not the same as a segregated custody holding. Foreign issuers seeking the law's market-access exception face other conditions: comparable home-country regulation, registration with the Office of the Comptroller of the Currency, and enough reserves at a U.S. financial institution to meet U.S. customer liquidity demands, unless a reciprocal arrangement says otherwise.

Tether's criticism of deposit rules and a push to change MiCA

Tether CEO Paolo Ardoino has shared criticism of MiCA's deposit requirements. On Sept. 22, he posted a passage reporting that European central banks wanted a deposit rule removed, including the line: "Tether refused an EU license over the same clause."

MiCA compliance concerns have already affected where USDT can be used. The Defiant reported earlier that Coinbase delisted USDT in Europe in December 2024 over MiCA compliance concerns.

In a September consultation response, the European System of Central Banks recommended replacing minimum bank-deposit requirements with minimum holdings of assets maturing within one and five working days. It also called for safeguards against contagion between stablecoins, banks and reserve-asset markets. The response proposes changing MiCA; it does not repeal the deposit rules.

Questions the sources leave open

Tether did not say how much money is involved in dollars, and it did not identify the affected assets as USDT reserves. The roughly $63.8 million figure comes from applying the stated percentage to an attested asset total. It is not Tether's own number.

The court order concerns accounts held in Capstone Limited's name. It does not decide liability, and the sources do not say that the seized amount equals whatever Tether holds at EQIBank.

Why this matters for USDT holders

For people who hold USDT, the issue is about access to money through a banking partner, not about a change in the token's value. Tether's statement does not say whether the funds at EQIBank are part of the reserves that back USDT, so that link remains unconfirmed.

Sources

• The Defiant