{"id":1678,"date":"2026-09-25T22:40:28","date_gmt":"2026-09-25T22:40:28","guid":{"rendered":"https:\/\/tcjsj.com\/?p=1678"},"modified":"2026-09-25T22:40:28","modified_gmt":"2026-09-25T22:40:28","slug":"us-department-of-justice-moves-to-seize-84-2-million-linked-to-tether-payment-processor","status":"publish","type":"post","link":"https:\/\/tcjsj.com\/?p=1678","title":{"rendered":"US Department of Justice Moves to Seize $84.2 Million Linked to Tether Payment Processor"},"content":{"rendered":"

The United States Department of Justice (DOJ) has launched a significant legal offensive aimed at forfeiting $84.2 million in assets that authorities allege were moved through accounts utilized by payment processors linked to the stablecoin giant Tether. The civil forfeiture complaint, filed on July 15 in the Eastern District of California and presided over by Judge Dale A. Drozd, centers on Capstone Ltd., a Montana-based payments firm that regulators now describe as an unlicensed money transmitter.<\/p>\n

The Allegations Against Capstone Ltd.<\/h3>\n

According to the government\u2019s filing, Capstone Ltd. operated as a money transmitter across at least six states without securing the necessary regulatory licenses. Under federal and state guidelines, entities that facilitate the movement of third-party funds are strictly required to be licensed and subject to anti-money laundering (AML) and know-your-customer (KYC) oversight. The complaint alleges that Capstone circumvented these requirements by misrepresenting its business model to traditional financial institutions, presenting itself as a standard IT services company rather than a financial intermediary.<\/p>\n

The scrutiny surrounding the firm intensified following an FBI-led investigation, which included the execution of a search warrant at a Sacramento residence associated with the company\u2019s owners, Kotaro Shimogori and Mary Jeanne Thompson. <\/p>\n

Legal representatives for Capstone have signaled a robust defense. In comments reported by the Financial Times<\/em>, the company\u2019s attorney stated that Capstone "denies any wrongdoing" and expressed a desire to "resolve this matter quickly." The firm, along with its banking partner, has already initiated an innocent-owner defense, a legal mechanism through which claimants argue that the seized assets were not involved in illicit activity or that the owner had no knowledge of any alleged illegal conduct.<\/p>\n

The Scope of the Forfeiture<\/h3>\n

The $84.2 million figure represents a substantial sum of capital frozen by federal authorities. The breakdown of these assets highlights the complex web of accounts used by the firm. The lion\u2019s share of the total\u2014approximately $79.11 million\u2014was pulled from a Wells Fargo Securities account held in Capstone\u2019s name on September 14. <\/p>\n

The remainder of the funds were scattered across various institutions and asset classes, underscoring the firm’s diverse financial footprint. Approximately $2.06 million was held at JPMorgan Chase, with another $1.86 million located in a separate Wells Fargo account. Additionally, roughly $1.1 million was identified in two digital wallets holding Tether (USDT), the world\u2019s most widely used stablecoin, which is designed to maintain a 1:1 parity with the US dollar.<\/p>\n

Civil forfeiture, the legal process being employed by the DOJ, allows the government to seize assets tied to alleged criminal activity without requiring a criminal conviction against the owner of the funds. This is a common tool in federal investigations involving money laundering, wire fraud, or the operation of unlicensed financial businesses.<\/p>\n

The EQIBank Connection<\/h3>\n

A critical component of the government’s case involves EQIBank, a Dominica-licensed digital bank that prosecutors allege acted as the architect behind Capstone\u2019s operations. The complaint suggests that EQIBank exerted significant control over how the payment processor moved funds. <\/p>\n

\"US<\/figure>\n

The potential impact of this forfeiture on EQIBank is severe. According to information brought to light during the proceedings, the bank has warned that losing these funds\u2014which represent roughly 80% of its total holdings\u2014could render it insolvent and force the institution into liquidation. This potential ripple effect highlights the precarious nature of the relationship between offshore digital banks and the payment processors that act as their gateways into the US financial system.<\/p>\n

Tether\u2019s Response and Market Context<\/h3>\n

For Tether, the world\u2019s largest stablecoin issuer, the situation presents a delicate public relations and regulatory challenge. The company confirmed that EQIBank played a role in facilitating its USDT purchase and redemption transfers. However, Tether has been quick to distance itself from the specific allegations levied against Capstone.<\/p>\n

In a statement provided to Reuters<\/em>, Tether insisted that it had "no knowledge of the conduct by Capstone alleged by the Department of Justice." The company emphasized its transparency, noting that the exposure related to this specific incident accounts for less than 0.034% of its total group assets. Given that Tether reported holding $187.75 billion in assets at the conclusion of the second quarter, the company is positioning the seized funds as a negligible fraction of its massive reserves.<\/p>\n

This is not the first time Tether and its sister company, Bitfinex, have faced intense regulatory scrutiny regarding their financial operations. In 2021, the companies reached a settlement with the New York Attorney General\u2019s office following a lengthy investigation into their reserve practices. As part of that settlement, Tether and Bitfinex admitted that USDT was not always backed dollar-for-dollar as previously claimed. The companies paid an $18.5 million fine and agreed to cease trading activities within the state of New York.<\/p>\n

Next Steps in the Legal Process<\/h3>\n

The legal battle over the $84.2 million is governed by Supplemental Rule G, which dictates the procedures for civil forfeiture actions in federal court. Following the government’s filing, claimants such as Capstone and EQIBank are provided with a strict 21-day window to respond to the complaint. Failure to adequately answer the government’s claims within this timeframe can result in a default judgment, effectively granting the government permanent control over the assets.<\/p>\n

As the case proceeds, the focus will likely remain on whether Capstone\u2019s classification as an IT services company was a deliberate attempt to deceive banking institutions and whether that deception provided the necessary cover for the alleged unlicensed money transmission. For the broader cryptocurrency industry, the case serves as a stark reminder of the increasing pressure regulators are applying to the "on-ramps" and "off-ramps" of the digital asset ecosystem. <\/p>\n

With both the Department of Justice and the legal teams representing the involved parties preparing for a potentially lengthy court battle, the status of the $84.2 million remains in limbo. The outcome of this case will likely influence how stablecoin issuers vet their banking partners and how those partners, in turn, manage the high-volume payment processing firms that operate on the periphery of the traditional financial system. Whether the assets will eventually be returned to their owners or forfeited to the federal government will depend on the strength of the evidence presented regarding the nature of the transactions and the regulatory compliance of the entities involved.<\/p>\n","protected":false},"excerpt":{"rendered":"

The United States Department of Justice (DOJ) has launched a significant legal offensive aimed at forfeiting $84.2 million in assets that authorities allege were moved through accounts utilized by payment processors linked to the stablecoin giant Tether. The civil forfeiture complaint, filed on July 15 in the Eastern District of California and presided over by […]<\/p>\n","protected":false},"author":17,"featured_media":1677,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[487],"tags":[490,489,488,2680,2681,536,1925,2256,2684,2685,2682,2683,491],"class_list":["post-1678","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-cryptocurrency-web3","tag-bitcoin","tag-blockchain","tag-crypto","tag-department","tag-justice","tag-linked","tag-million","tag-moves","tag-payment","tag-processor","tag-seize","tag-tether","tag-web3"],"_links":{"self":[{"href":"https:\/\/tcjsj.com\/index.php?rest_route=\/wp\/v2\/posts\/1678","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/tcjsj.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/tcjsj.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/tcjsj.com\/index.php?rest_route=\/wp\/v2\/users\/17"}],"replies":[{"embeddable":true,"href":"https:\/\/tcjsj.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=1678"}],"version-history":[{"count":0,"href":"https:\/\/tcjsj.com\/index.php?rest_route=\/wp\/v2\/posts\/1678\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/tcjsj.com\/index.php?rest_route=\/wp\/v2\/media\/1677"}],"wp:attachment":[{"href":"https:\/\/tcjsj.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1678"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/tcjsj.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1678"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/tcjsj.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1678"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}