Offshore banking partner EQIBank is currently facing potential liquidation, leaving funds belonging to Tether (USDT) trapped. The situation was triggered by a US asset seizure connected to the bank.
According to Tether, the affected funds constitute a minimal exposure of under 0.034% of its overall assets. While the company has not confirmed the report directly or provided a specific dollar amount, the incident prompts inquiries regarding the exact volume of capital Tether maintains offshore.
Why EQIBank Is at Risk
The exposure was initially brought to light by The Information. EQIBank, a digital institution holding a license in Dominica, is currently working to reclaim approximately $89 million. This sum was confiscated by US authorities from accounts associated with Capstone Ltd, a payment processor.
Legal filings from the bank indicate that the locked funds were held with JPMorgan Chase and Wells Fargo. This enforcement action effectively stripped the institution of roughly 80% of its total monetary reserves.
Due to the magnitude of the loss, EQIBank has cautioned that it could face liquidation—creating the circumstances that led to Tether’s deposits becoming stuck.
The Real Question Is Concentration
The core issue is not a single bank holding 0.034% of Tether’s assets. Rather, the missing piece is how much of Tether’s total reserves are distributed across offshore banks in general. This metric would reveal the true extent of exposure beyond secure assets like US Treasuries and money market funds.
Historically, heavy deposit concentration at smaller financial institutions has triggered bank runs. For instance, multiple US companies lost access to their deposits during the collapse of Silicon Valley Bank in 2023.
Furthermore, Tether’s reserve cushion has seen a reduction even following a successful 2025 audit. This development generates a separate concern regarding the company’s capacity to withstand multiple offshore shocks of this nature simultaneously.
Based on Tether’s latest attestation, total reserves approach roughly $190 billion, with the majority kept in US Treasuries. The specific portion of that total sitting in offshore banks remains the unanswered question of this event.
Legal proceedings concerning EQIBank’s seized funds are ongoing in California. Whether this event remains a minor footnote will depend on if Tether chooses to provide a detailed breakdown of its offshore exposure.