Tether Caps EQIBank Exposure Below $64M After $89M US Seizure

US Authorities Seize $89M in EQIBank Assets

Federal prosecutors unsealed court documents this week revealing an $89 million asset seizure targeting EQIBank, a Dominica-licensed institution that has provided fiat banking services to crypto exchanges and stablecoin issuers. The seizure stems from an investigation into alleged money-laundering violations and unlicensed money-transmission activity, according to the filings.

Tether Limits Exposure Below $64M

Tether Holdings Ltd. responded Thursday with a public disclosure stating its maximum contractual exposure to EQIBank is capped at under $64 million. The company emphasized that the figure represents a pre-set risk ceiling, not a realized loss, and that USDT redemptions continue normally. Reserves remain fully backed by liquid assets, Tether said.

Fiat Gateway Concentration Risk

The incident highlights the structural dependence of digital-asset markets on a narrow set of banking partners. While Tether has broadened its correspondent network across Europe, Asia, and the Caribbean since 2023, smaller stablecoin issuers and regional exchanges often rely on a single fiat gateway. A sudden disruption at that partner can freeze deposits and withdrawals for thousands of users.

Regulatory Pressure on Offshore Banks

EQIBank's seizure follows a pattern of US enforcement actions targeting offshore banks that serve crypto clients without robust AML compliance. In 2024, the shutdown of Signature Bank and Silvergate Bank forced a rapid migration to Caribbean and European alternatives. Regulators have signaled continued scrutiny of institutions that onboard digital-asset firms without full BSA/AML programs.

Source: CoinDesk