The US Department of Justice filed a civil forfeiture complaint targeting $84.2 million in accounts tied to Capstone Ltd., a payments firm prosecutors say moved money for Tether without a license. Tether says it had no knowledge of the alleged conduct and puts its exposure at under 0.034% of group assets.
The US Department of Justice wants to keep $84.2 million that, according to a civil forfeiture complaint, moved through accounts used to process payments for Tether.
The forfeiture complaint
The complaint, filed July 15 in the Eastern District of California before Judge Dale A. Drozd, targets Capstone Ltd., a Montana-based payments firm. Prosecutors allege Capstone operated as an unlicensed money transmitter in at least six states and presented itself to banks as an ordinary IT services company.
Capstone's owners, identified as Kotaro Shimogori and Mary Jeanne Thompson, are named in the complaint, and the FBI executed a search warrant at a Sacramento residence. Their attorney said the company denies any wrongdoing and hopes to resolve the matter quickly.
Where the money sat
Of the $84.2 million at stake, $79.11 million came out of a Wells Fargo Securities account in Capstone's name on September 14. Civil forfeiture lets the government seize funds tied to an alleged crime without a criminal conviction against the money's owner.
Another $2.06 million sat at JPMorgan Chase, $1.86 million in a separate Wells Fargo account, and just over $1.1 million was split across two USDT wallets. Behind Capstone sits EQIBank, a Dominica-licensed digital bank that prosecutors say directed how the processor moved money. EQIBank has warned that losing those funds — roughly 80% of everything the bank holds — could push it into liquidation.
Tether's response
Tether confirmed EQIBank handled its USDT purchase and redemption transfers, but in a statement to Reuters said it had "no knowledge of the conduct by Capstone alleged by the Department of Justice."
A spokesperson put total exposure at under 0.034% of group assets. That compares with the $187.75 billion in assets Tether reported at the close of the second quarter.
This isn't the first time Tether and its sister company Bitfinex have faced scrutiny over how they move money. In 2021, both companies reached a settlement with the New York Attorney General after admitting USDT wasn't always backed dollar-for-dollar as advertised. They paid an $18.5 million fine and agreed to stop trading in the state.
Capstone and EQIBank have already filed an innocent-owner defense over the seized funds. Under Supplemental Rule G, which governs these forfeiture cases, any claimant has 21 days to answer the government's complaint once a formal claim is filed with the court.
Source: Decrypt
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