The US Department of Justice (DOJ) has officially filed a civil forfeiture lawsuit to seize $84.2 million from several accounts previously used to process Tether transactions.
The civil forfeiture complaint was filed in the U.S. District Court for the Eastern District of California. The primary target is not Tether itself, but an entity named Capstone Ltd. Prosecutors allege that the Montana-based payments firm operated as an unlicensed money transmitter across at least six US states.
Of the total funds targeted by prosecutors, $79.11 million in cash was seized directly from a Wells Fargo Securities account held under Capstone’s name on September 14.
EQIBank Faces Threat of Liquidation
The DOJ legal action has also ensnared EQIBank, a digital bank licensed in Dominica. Court filings allege the bank played a role in directing how Capstone moved funds. For EQIBank, the seizure has triggered an existential crisis. Management warned that losing the $84.2 million could force the company into liquidation, as the seized sum represents 80% of total customer deposits at the bank.
Tether Unfazed, Capstone Mounts Defense
Tether confirmed the limited scope of its involvement in its partner’s legal battle. The company stated that while EQIBank served as a partner handling USDT purchase and redemption transfers, Tether was entirely unaware of the licensing violation allegations against Capstone.
The tens of millions of dollars threatening EQIBank’s operations have minimal impact on Tether’s balance sheet. The company disclosed that its total exposure to the Dominican bank represents less than 0.034% of the group’s total $187.75 billion in assets.
On the defense side, Capstone owners Kotaro Shimogori and Mary Jeanne Thompson have chosen to contest the case in court. Responding to the DOJ’s seizure through their legal team, both firmly denied all allegations of operating an unlicensed money transmitting business.
Reported via Decrypt.
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Disclaimer: This article is for informational and educational purposes only, not financial advice. Cryptocurrency assets are highly volatile and carry significant risk. Always do your own research (DYOR) and never invest more than you can afford to lose.
