Tether says it had ‘limited’ exposure to bank linked to $84M US seizure
US prosecutors alleged that a payments business illegally transferred hundreds of millions of dollars at the direction of EQIBank, where Tether holds some assets.
Asanat Analysis — Why it matters
Tether's statement of 'limited' exposure to EQIBank following an $84M US seizure signals operational compartmentalization but raises broader questions about stablecoin reserve custody practices. The allegation centers on a payments business facilitating hundreds of millions in transfers at EQIBank's direction—suggesting potential AML/sanctions compliance gaps at institutions holding reserve assets. This echoes recurring scrutiny of Tether's banking relationships dating to its historical connections with entities that later faced regulatory action.
For the sector, the incident underscores persistent tension between stablecoin collateralization claims and the opacity of actual asset custody. Even 'limited' exposure implies Tether maintains reserves at institutions with enforcement risk—a structural vulnerability in an ecosystem where reserve confidence underpins $150B+ in circulating USDT. Regulatory authorities appear increasingly focused on the financial plumbing beneath stablecoins, not just the tokens themselves. Competitors like USDC (Circle) and PYUSD (PayPal) have emphasized insured bank deposits at systemically important institutions, implicitly positioning themselves as lower-custody-risk alternatives.