Tether’s Offshore Bank Just Froze its Funds: Is There a Risk for USDT?
Tether (USDT) has funds trapped at an offshore banking companion, EQIBank, which is dealing with liquidation danger. A United States (US) asset seizure tied to the financial institution set that off.
Tether mentioned the publicity is proscribed, representing lower than 0.034% of its complete belongings. It has not disclosed a greenback determine or confirmed the report straight. However, it raises questions as to how a lot Tether is protecting offshore.
Why EQIBank Is at Risk
The Information first reported the publicity. EQIBank, a digital financial institution licensed in Dominica, is combating to get better about $89 million. US authorities seized the cash from accounts tied to a cost processor, Capstone Ltd.
Its personal filing reveals the frozen funds sat at Wells Fargo and JPMorgan Chase. The seizure took roughly 80% of EQIBank’s complete financial holdings.
That scale is why EQIBank has warned it might face liquidation, the backdrop towards which Tether’s personal deposits acquired caught.
The Real Question Is Concentration
A single financial institution holding 0.034% of Tether’s belongings will not be the chance. What is undisclosed is how a lot of Tether’s reserves sit in offshore banks general. That determine would present actual publicity, not US Treasuries and cash market funds.
Reserve focus at smaller banks has brought on runs earlier than. Several US corporations misplaced deposit entry when Silicon Valley Bank failed in 2023.
Tether’s reserve cushion has additionally been shrinking even after a clear 2025 audit. That raises a associated query, whether or not it might take up a number of offshore shocks like this one directly.
Tether’s most up-to-date attestation places complete reserves near $190 billion, most held in US Treasuries. The offshore-bank slice behind that complete is the element this episode nonetheless has not answered.
EQIBank’s case over the seized funds stays energetic in California. Any transfer by Tether to interrupt down its offshore publicity will determine whether or not this stays a footnote.
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