The Department of Justice executed a civil forfeiture action against Capstone, a Montana-based payment processor, seizing $84 million from company accounts at Wells Fargo and JPMorgan Chase.
According to court documents, Tether, the issuer of USDT, and Bitfinex used Capstone to open bank accounts and make payments to hundreds of individuals and entities without the processor being licensed to do so. The companies misrepresented Capstone's business as an IT services company.
Capstone operated through a relationship with EQIBank, a bank registered in Dominica that specialized in online payments. Tether had invested in EQIBank and offered to increase its backing in exchange for the bank's ability to secure U.S. bank accounts for Tether, including at Singapore's DBS bank.
Capstone moved over $700 million through its Wells Fargo account, with prosecutors stating that nearly two-thirds of those transfers were directed to hundreds of individuals and entities on behalf of Tether and Bitfinex, with most payments routed outside the U.S.
The seizure represents approximately 80 percent of EQIBank's total holdings, prompting the bank to warn it may face liquidation as a result.
Tether and Bitfinex acknowledged being customers of EQIBank but denied knowledge of any wrongdoing by Capstone. Tether stated that the frozen funds represent less than 0.034 percent of its total assets.
Prosecutors also alleged that Capstone facilitated the conversion of stolen cash from impersonation fraud schemes targeting elderly citizens into stablecoins.
The case highlights ongoing challenges faced by cryptocurrency companies in accessing traditional banking services and their reliance on third-party payment processors to maintain U.S. financial infrastructure connections.
