Tether Says Exposure to Sanctioned EQIBank Below 0.034% of Reserves

Tether has moved to reassure the market that its exposure to EQIBank, an offshore bank now facing a potential liquidation after a US asset seizure, is negligible relative to its overall reserves.

The stablecoin issuer said its exposure to EQIBank stands at less than 0.034% of its total assets. Tether International reported total assets of $187.75 billion in an attestation dated June 30, meaning the disclosed percentage implies a modest sum relative to the company's overall balance sheet, though Tether itself has not confirmed a dollar figure.

EQIBank, licensed and regulated by the Financial Services Unit of Dominica, was first reported by The Information to have funds stuck at the bank. The institution's troubles stem from a US federal court order dated September 14 listing accounts seized in connection with payment processor Capstone Limited. Authorities seized accounts held at Wells Fargo and JPMorgan Chase, with Wells Fargo Securities accounts tied to Capstone alone accounting for approximately $79.1 million.

EQIBank has said the seizure amounts to roughly $89 million of its holdings, which it describes as approximately 80% of its cash position, a level of exposure that has raised the prospect of liquidation for the bank.

A Tether spokesperson told CoinDesk that "Tether had no knowledge of the conduct by Capstone alleged by the Department of Justice," seeking to distance the company from the underlying allegations that triggered the seizure.

MiCA rules back in the spotlight

The episode has reignited Tether's long-running dispute with European regulators over reserve requirements under the Markets in Crypto-Assets regulation. MiCA's Article 54 requires stablecoin issuers to hold at least 30% of funds received in EU-authorized credit institutions, a threshold Tether has repeatedly criticised as it has stayed outside the bloc's licensing regime.

Coinbase removed USDT from its European listings in December 2024 as exchanges adjusted to MiCA compliance expectations. On September 22, Tether chief executive Paolo Ardoino renewed his criticism of the deposit clause, saying "Tether refused an EU license over the same clause."

For European users of USDT, the EQIBank affair is unlikely to move reserve adequacy in any material way given the disclosed exposure. But it lands at a moment when the bloc's regulators, banks within the European System of Central Banks, and market participants continue to scrutinise how stablecoin issuers manage counterparty risk with institutions operating outside the EU's supervisory perimeter, and outside frameworks such as the US GENIUS Act as well.