DOJ seeks $84.2M from Capstone, EQIBank over Tether payment processing
In brief
- DOJ filed civil forfeiture complaint July 15 seeking $84.2M tied to Tether payment processing
- Capstone Ltd. allegedly operated as unlicensed money transmitter across six states
- EQIBank directed Capstone's money movement, prosecutors allege
- Tether confirmed EQIBank handled USDT transfers but denied knowledge of Capstone conduct
- Seized funds represent 80% of EQIBank holdings and could force liquidation
The complaint and the money
The DOJ's complaint was filed in the Eastern District of California before Judge Dale A. Drozd. Capstone operated as an unlicensed money transmitter in at least six states while presenting itself to banks as an ordinary IT services company. The firm's owners, identified as Kotaro Shimogori and Mary Jeanne Thompson, are named in the complaint.
The $84.2 million sits in multiple accounts. Of that total, $79.11 million came from a Wells Fargo Securities account in Capstone's name on September 14. 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.
EQIBank's exposure and Tether's response
Behind Capstone sits EQIBank, a Dominica-licensed digital bank that prosecutors say directed how the processor moved money. The stakes are high for the Caribbean institution. EQIBank warned that losing the seized funds—roughly 80% of everything the bank holds—could push it into liquidation.
Tether's position is more insulated. 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," according to a company spokesperson. Total exposure sits at under 0.034% of group assets—negligible against the $187.75 billion in assets the stablecoin issuer reported at the close of the second quarter.
This isn't Tether's first brush with regulators. 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. The settlement included an $18.5 million fine and an agreement to stop trading in the state.
What comes next
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. Capstone's attorney said the company "denies any wrongdoing" and hopes to "resolve this matter quickly."
