US prosecutors seek $84.2 million tied to Tether transfers

The US Department of Justice seeks to keep $84.2 million that moved through accounts used to process payments for Tether. The civil forfeiture complaint was filed July 15 in the Eastern District of California. The complaint targets Capstone Ltd., a Montana-based payments firm. The complaint says Capstone operated as an unlicensed money transmitter in at least six states. The complaint says Capstone presented itself to banks as an ordinary IT services company. The complaint names Capstone owners Kotaro Shimogori and Mary Jeanne Thompson. Their attorney said Capstone denies wrongdoing and hopes to resolve the matter quickly. $79.11 million came from a Wells Fargo Securities account in Capstone's name on September 14. Another $2.06 million was held at JPMorgan Chase. A separate Wells Fargo account held $1.86 million. Just over $1.1 million was held across two wallets in USDT. USDT is Tether's stablecoin. EQIBank is a Dominica-licensed digital bank behind Capstone. Prosecutors say EQIBank directed how Capstone moved money. EQIBank warned that losing the funds could push it into liquidation. The funds represent roughly 80% of everything EQIBank holds. Tether confirmed EQIBank handled its USDT purchase and redemption transfers. Tether said it had no knowledge of the conduct alleged by the Department of Justice. A spokesperson put Tether's total exposure below 0.034% of group assets. Tether reported $187.75 billion in assets at the close of the second quarter. Tether and Bitfinex reached a settlement with the New York Attorney General in 2021. The companies paid an $18.5 million fine and agreed to stop trading in New York. Capstone and EQIBank filed an innocent-owner defense over the seized funds. Claimants have 21 days to answer the government's complaint after filing a formal claim with the court under Supplemental Rule G.