In brief
- The Department of Justice filed a civil forfeiture complaint on July 15 targeting $84.2 million in accounts tied to Capstone Ltd., a payments firm prosecutors say moved money for Tether without the required license.
- The bulk of the money, $79.11 million, sat in a Wells Fargo Securities account; smaller sums were held at JPMorgan Chase and in two USDT wallets.
- Tether confirmed EQIBank, the Dominica-based bank behind Capstone, processed its wire transfers, but said it had “no knowledge” of the conduct under investigation and put its exposure at less than 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 complaint, filed July 15 in the Eastern District of California before Judge Dale A. Drozd, targets Capstone Ltd., a Montana-based payments firm. According to the complaint, Capstone operated as an unlicensed money transmitter—a business category regulators require a license for specifically because it moves other people’s money—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 while the FBI executed a search warrant at a Sacramento residence. Their attorney said the company “denies any wrongdoing” and hopes to “resolve this matter quickly,” according to the Financial Times.
Of the $84.2 million at stake in the forfeiture, $79.11 million came out of a Wells Fargo Securities account in Capstone’s name on September 14. Civil forfeiture is a legal process that 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 wallets holding USDT, Tether’s stablecoin—a crypto token built to always trade for one dollar.
Behind Capstone sits EQIBank, a Dominica-licensed digital bank that prosecutors say directed how the processor moved money. EQIBank has already warned that losing those funds—roughly 80% of everything the bank holds—could push it into liquidation.
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→Tether confirmed EQIBank handled its USDT purchase and redemption transfers, but insisted it had “no knowledge of the conduct by Capstone alleged by the Department of Justice,” in a statement provided to Reuters. A spokesperson put total exposure at under 0.034% of group assets—a share that feels like nothing against 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 landed in a prosecutor’s crosshairs 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, paying an $18.5 million fine and agreeing 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.
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