US federal prosecutors have taken legal action to freeze approximately $84 million held in accounts belonging to payment processor Capstone. The seizure is part of a civil forfeiture lawsuit filed by the US Department of Justice (DOJ). Law enforcement authorities allege that Capstone processed hundreds of millions of dollars in unlicensed transfers, financial activity purportedly carried out under the direction of EQIBank.
Initial complaint filings from the DOJ indicate that Capstone processed transactions for various third parties. The forfeiture documents note that these fund flows also included money movement belonging to clients of stablecoin issuer Tether and its affiliated exchange, Bitfinex.
Denies Involvement in Unlicensed Transactions
Management quickly responded after client names were cited in law enforcement documents. Tether denied any direct involvement in the unlicensed money transmission operations alleged against Capstone. A company spokesperson emphasized that the firm had no knowledge of the illicit activities currently being investigated by federal prosecutors.
The stablecoin issuer stated that while it holds assets, its exposure is very limited at the bank now caught up in the DOJ’s civil forfeiture case. This public confirmation was released specifically to clarify the status of the company’s reserve funds following the prosecution’s asset seizure announcement.
0.034% Exposure of Total Assets
A Tether spokesperson noted that the exact figure of the company’s deposits in EQIBank accounts represents just 0.034% of its overall reserve assets. These details were disclosed to clearly define their risk exposure profile regarding the embroiled banking institution.
The market capitalization of the USDT stablecoin currently hovers around $184 billion. Given reserves of this magnitude, the 0.034% share confirms that the funds at EQIBank represent only a tiny fraction of the reserve structure backing the token’s value.
The disclosure of this reserve proportion illustrates how major crypto entities insulate their funds from third-party payment provider crises. While the DOJ’s civil forfeiture lawsuit continues to target Capstone’s fund flows, the asset breakdown helps ensure USDT’s stability guarantees remain secure and insulated from seizure risks.
Reported via Cointelegraph.
Read also: What Is DeFi (Decentralized Finance)?
Previously: US Prosecutors’ $84M Lawsuit Hits Tether Intermediary - One Digital Bank Loses 80% of Deposits
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.
