US Prosecutors Seek $84.2M From Bank Linked to Tether and EQIBank

What happened: The U.S. Department of Justice filed a civil forfeiture complaint targeting $84.2 million held in accounts connected to Capstone Ltd., a Montana payments firm accused of acting as an unlicensed money transmitter and serving as a conduit between EQIBank (a Dominica-licensed digital bank) and the U.S. banking system. The seizure includes funds at Wells Fargo Securities, JPMorgan Chase, and two USDT wallets. Capstone principals allegedly misrepresented their business to banks and facilitated illicit conversions of stolen cash into stablecoins. EQIBank, which held the majority of the seized funds, now faces a potential operational collapse after losing access to approximately 80% of its assets.

Why it matters: This action underscores the ongoing regulatory scrutiny of crypto banking channels and the risks posed by opaque payment intermediaries. While neither Tether nor Bitfinex are charged, the incident exposes vulnerabilities in the infrastructure supporting major stablecoins and highlights the fragility of banking relationships in the crypto sector. The case also raises questions about the sufficiency of due diligence by both digital banks and stablecoin issuers.

Source: Decrypt