Stablecoin issuer Tether said it has very little exposure to a lender seized by U.S. authorities on Thursday.
Tether said assets it holds at EQIBank represent less than 0.034% of its total assets, after the Dominica-licensed lender was caught up in a U.S. asset seizure that it said could force it into liquidation, according to reports by the Financial Times and The Information.
“Tether had no knowledge of the conduct by Capstone alleged by the Department of Justice,” a Tether spokesperson told CoinDesk via email. The company said assets held at EQIBank were limited to “less than 0.034% of the assets of the group,” but did not disclose the exact dollar amount.
Based on Tether’s June report of $187.75 billion in group assets, the percentage the spokesperson said was at risk would put the EQIBank exposure at roughly $64 million.
EQIBank used Capstone, a U.S. payment processor, to hold funds and move customer money through accounts at Wells Fargo and JPMorgan Chase, according to court filings. U.S. prosecutors seized money from those Capstone accounts and filed a civil forfeiture case, alleging that Capstone misrepresented its business to banks.
EQIBank says roughly $89 million was seized, equal to about 80% of its monetary holdings, putting the lender at risk of liquidation, according to FT.
EQIBank provided banking services to Tether, including processing wire transfers linked to purchases and redemptions of $USDT. Tether confirmed its limited exposure to EQIBank but did not disclose the dollar value, The Information reported.
The disclosure does not suggest an immediate threat to $USDT’s reserves or dollar peg. But it highlights the counterparty risk in the network of banks that help stablecoin issuers process customer deposits and redemptions.