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US prosecutors are seeking to forfeit $84.2 million from Capstone Limited, an obscure Sacramento payment firm that allegedly moved money through Wells Fargo and JPMorgan for EQIBank, the offshore bank serving Tether. Tether is not accused of wrongdoing, but the case exposes how fragile the dollar plumbing behind USDT can be.
The connection begins with EQIBank, a Dominica-based bank that provided banking services to Tether.
According to The Information, EQIBank processed wire transfers for clients buying and selling Tether’s USDT. Because the offshore bank needed access to the US financial system, it turned to Capstone Limited, a Sacramento-based payment company that held funds and moved customer money through US banks.
Capstone maintained accounts at Wells Fargo and JPMorgan Chase, according to court filings. Those accounts eventually became the focus of the federal forfeiture case.
The arrangement meant that money connected to Tether’s USDT activity could pass through a chain that looked roughly like this:
Tether → EQIBank → Capstone → US banks
The structure itself is not alleged to be illegal.
The problem, prosecutors say, was how Capstone represented its business to the banks providing that access.
According to the government’s allegations, Capstone presented itself to US banks as an information-technology business while using its accounts to move money for other parties. Prosecutors allege that Capstone repeatedly failed to disclose that it was handling funds for others and that virtual-currency transactions formed part of its business.
That distinction became important because money transmitters can face additional regulatory scrutiny and licensing requirements.
Interestingly, Capstone had registered with the Financial Crimes Enforcement Network as a money-services business, according to court filings cited by The Information. EQIBank had turned to the company in 2024 because Capstone represented that it had relationships with major US banks and could help move money for EQIBank’s customers.
The government’s case goes beyond a disagreement over Capstone’s corporate description.
Court filings allege that Capstone moved hundreds of millions of dollars through its US banking relationships.
Reporting by the Financial Times said prosecutors allege Capstone moved more than $700 million through one of its bank accounts, with almost two-thirds of the money appearing to have been sent to hundreds of individuals and entities on behalf of Tether and Bitfinex.
That figure is important, but it should not be confused with the amount now subject to forfeiture.
The government is seeking approximately $84.2 million in the current civil case.
The property identified in the forfeiture proceedings includes about:
At USDT’s dollar peg, the listed property comes to roughly $84.2 million. EQIBank, however, has separately described the amount caught up in the seizure as about $89 million. The two figures come from different filings and have not been reconciled by a court.
The timing is also more complicated than a single July seizure.
The cryptocurrency assets were seized on March 4, the JPMorgan account on March 9, and the two Wells Fargo accounts on June 2, according to the government’s seizure notices. The civil forfeiture complaint was subsequently filed on July 15.
That means the July filing was the government’s move to permanently forfeit property that had already been seized.
Capstone’s relationships with US banks had already started deteriorating before the federal forfeiture action.
According to court filings reported by The Information, Citi identified concerns about Capstone’s transactions during a review in May 2025 and closed its accounts over potential money-laundering concerns.
Capstone subsequently shifted some funds and wire activity to Wells Fargo.
JPMorgan then identified transactions involving people who appeared to be victims of suspected impersonation scams, according to the government’s allegations.
One transaction illustrates the problem prosecutors are investigating.
Capstone allegedly told JPMorgan that a payment involved software licensing and related charges. But a Capstone executive later told Miami Beach police that the transaction was actually connected to the purchase of Tether stablecoins, according to government court filings.
The government also alleges that Capstone helped convert money stolen through impersonation schemes into cryptocurrency.
In the alleged scheme, victims sent money into Capstone-controlled bank accounts, after which the company transferred equivalent cryptocurrency to third parties, less fees. Prosecutors argue that this activity amounted to unlicensed money transmission in multiple states.
The FBI also searched the Sacramento home of Capstone operator Kotaro Shimogori in February as part of the investigation into what prosecutors described as a crypto-for-cash scheme.
Capstone denies wrongdoing. Its lawyer, Brian Klein, said the company cooperated with the government’s investigation and planned to challenge the civil forfeiture complaint.
There is no allegation in the available reporting that Tether knew about or participated in the alleged impersonation fraud.
The $84.2 million figure can easily create the impression that Tether itself has $84.2 million at risk.
That is not what the available evidence shows.
Tether confirmed that it was a customer of EQIBank and said its assets held there represented less than 0.034% of the group’s total assets. Based on Tether’s reported $187.75 billion in assets at June 30, that percentage implies exposure below roughly $63.8 million. Tether has not disclosed the exact amount.
Tether also said it had no knowledge of the conduct by Capstone alleged by the Department of Justice.
That makes three different figures relevant to the case:
$84.2 million — the approximate value of property identified by the US government in the forfeiture case.
About $89 million — EQIBank’s description of the amount it says was seized, representing about 80% of its monetary holdings.
Less than $63.8 million — the implied upper limit of Tether’s EQIBank exposure based on Tether’s 0.034% disclosure.
They should not be treated as interchangeable.
The case also does not establish that Tether beneficially owns the bank accounts or cryptocurrency addresses named in the government’s forfeiture complaint.
For Tether, this is therefore primarily a banking-counterparty problem, rather than evidence that $84.2 million of USDT reserves have disappeared.
That distinction is particularly relevant given Tether’s history of working with law enforcement to freeze suspected illicit USDT. The Bit Gazette previously reported how the DOJ credited Tether with helping trace more than $52 million linked to the Xinbi scam network.
In another recent case, Tether froze 218,000 USDT linked through transaction activity to the $351.6 million Bitget theft after the funds were identified as connected to the exchange breach.
The Capstone case shows a different vulnerability: not what happens to USDT on the blockchain, but what happens to the dollars moving around the banking system behind it.
For EQIBank, the consequences are considerably larger.
The bank has told the court that the seized funds represent roughly 80% of its monetary holdings and has warned that the loss could threaten its ability to continue operating. EQIBank says it is an innocent owner of the funds and argues that it was misled by Capstone about the company’s banking and regulatory position.
EQIBank sought the return of the seized property through a Rule 41(g) motion filed on June 29.
The government filed its civil forfeiture complaint on July 15.
A judge denied EQIBank’s Rule 41(g) motion at a July 16 hearing, but the ruling did not determine that EQIBank had no ownership rights over the money. The forfeiture case itself remains unresolved.
That distinction matters because the case is still fundamentally a dispute over property.
The government is asking the court to permanently forfeit the assets. EQIBank is seeking to recover them. Capstone has said it will challenge the government’s allegations.
No final judgment has established that Capstone committed the alleged offenses, that EQIBank was involved in them, or that Tether participated in them.
The case nevertheless exposes a structural issue for Tether.
USDT itself operates on blockchain networks, but the dollars entering and leaving the ecosystem still depend on banks, payment companies and financial intermediaries.
Tether has built a large reserve portfolio and strengthened its relationships with traditional financial institutions. But the Capstone investigation shows that some parts of its transaction infrastructure can still depend on smaller intermediaries several steps removed from the issuer itself.
That is why the case matters even if Tether ultimately loses little or none of its money.
EQIBank needed access to the US banking system.
Capstone provided that bridge.
Capstone’s bank accounts subsequently came under federal scrutiny.
And some of the funds moving through that infrastructure were connected to transactions involving Tether and Bitfinex, according to prosecutors and reporting based on the court filings.
Tether has already been moving to broaden its banking relationships. The Information reported that the company invested in Pave Bank, a Georgia-licensed commercial bank, in a $39 million funding round led by Accel.
The Capstone case gives that strategy another layer of context.
For now, there is no evidence that the seizure threatens USDT’s reserves or its dollar peg. Tether’s disclosed exposure to EQIBank is small relative to its overall asset base, and the forfeiture proceedings have not established that Tether owns the seized property.
But the case has revealed something less visible.
Behind a stablecoin that now sits at the center of global crypto markets is a network of banks and payment companies responsible for moving the dollars that make the system work.
When one of those intermediaries comes under federal scrutiny, the consequences can travel far beyond the company named in the government’s complaint.
For Tether, Capstone may ultimately prove less significant for the amount of money caught in the seizure than for what the case reveals about the banking network behind USDT.
Investigation; The Finanacial Times and The Information
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