Tether (USDT) has funds trapped at an offshore banking partner, EQIBank, which is facing liquidation risk. A United States (US) asset seizure tied to the bank set that off.
Tether said the exposure is limited, representing less than 0.034% of its total assets. It has not disclosed a dollar figure or confirmed the report directly. However, it raises questions as to how much Tether is keeping offshore.
Why EQIBank Is at Risk
The Information first reported the exposure. EQIBank, a digital bank licensed in Dominica, is fighting to recover about $89 million. US authorities seized the money from accounts tied to a payment processor, Capstone Ltd.
Its own filing shows the frozen funds sat at Wells Fargo and JPMorgan Chase. The seizure took roughly 80% of EQIBank’s total monetary holdings.
That scale is why EQIBank has warned it could face liquidation, the backdrop against which Tether’s own deposits got stuck.
The Real Question Is Concentration
A single bank holding 0.034% of Tether’s assets is not the risk. What is undisclosed is how much of Tether’s reserves sit in offshore banks overall. That figure would show real exposure, not US Treasuries and money market funds.
Reserve concentration at smaller banks has caused runs before. Several US firms lost deposit access when Silicon Valley Bank failed in 2023.
Tether’s reserve cushion has also been shrinking even after a clean 2025 audit. That raises a related question, whether it could absorb several offshore shocks like this one at once.
Tether’s most recent attestation puts total reserves close to $190 billion, most held in US Treasuries. The offshore-bank slice behind that total is the detail this episode still has not answered.
EQIBank’s case over the seized funds remains active in California. Any move by Tether to break down its offshore exposure will decide whether this stays a footnote.
Source: BeInCrypto
