Tether Confirms EQIBank Exposure Under 0.034% as USDT Holds $1

Tether confirmed on 25 September 2026 that it holds funds at EQIBank, a Dominica-licensed offshore bank that has warned it could be forced into liquidation after US authorities seized most of its cash. The stablecoin issuer put the exposure at less than 0.034% of total assets — under $64 million against its Q2 reserves report. USDT traded at about $0.9997 in Asia on Friday, essentially unchanged from its $1 peg, suggesting traders read the disclosure as contained rather than systemic.

Context — why the EQIBank seizure matters for stablecoin holders

The timing is awkward for crypto generally. Tether's disclosure lands a day after the Bitget hack, extending a week already heavy with counterparty worries across exchanges and issuers. Each event is manageable on its own. Together they push the same question to the front of the market: who is holding the cash behind the tokens, and how quickly can that cash be reached?

EQIBank's own filings describe the pressure plainly. The bank says the seized funds account for roughly 80% of its cash holdings, and on 9 September it warned that losing them could force liquidation — the legal process of winding down a failed business and paying creditors from whatever remains. Depositors in a liquidation can wait years and may recover less than their original balance.

The seizure itself is substantial relative to the bank's size. US authorities took about $89 million linked to EQIBank, held through accounts at US payment processor Capstone Ltd. Prosecutors filed a forfeiture complaint in July seeking to keep $84.2 million permanently. EQIBank is contesting the action in a California federal court.

For Tether, the mechanics matter more than the headline. Stablecoin issuers hold reserves in a mix of cash, government bonds and other assets, and some of that cash must sit in bank accounts. When one of those banks fails, the issuer becomes an unsecured creditor. There is no deposit insurance equivalent for this arrangement, which is why even small bank exposures attract scrutiny.

Data — what the numbers show

Tether's disclosed exposure is tiny against its overall balance sheet. At less than 0.034% of total assets, the EQIBank position works out to under $64 million based on the Q2 reserves report. Tether has not disclosed the exact figure, so the $64 million is a ceiling derived from the percentage and the reported asset base, not a confirmed amount.

Metric	Figure
Tether exposure (max)	Under $64 million
Share of total assets	Less than 0.034%
Funds seized from EQIBank	About $89 million
Forfeiture sought	$84.2 million
Seized share of bank cash	About 80%
USDT price, Asia Friday	About $0.9997

The scale gap is the story. Tether's exposure is smaller than the amount US authorities seized from the bank in the first place, which means the loss to Tether — even in a full liquidation with zero recovery — would be a fraction of a percent of reserves. The bank's position is the opposite: roughly four-fifths of its cash is tied up in a legal fight it may not win. The Information first reported Tether's exposure on 24 September.

Analysis — what it means for crypto markets and offshore banks

The direct market read is limited. USDT holding near $0.9997 is the clearest signal that traders are not pricing a reserve shortfall. If the market believed Tether's backing was impaired, the token would trade below par as holders exited, and arbitrageurs would need to absorb the flow. That has not happened.

The second-order effects fall on smaller offshore banks that serve crypto firms. EQIBank is licensed in Dominica, and its reliance on a US payment processor for dollar access is a structural vulnerability shared by many banks in the same niche. Clients and regulators may now ask harder questions about where crypto firms' cash sits and how quickly it can move if a bank is cut off from the dollar system.

The counter-argument deserves weight. Tether's reserve reports show what the issuer holds, not always where it holds it or how fast it can be accessed. That opacity is the reason a 0.034% exposure generates headlines at all. A larger undisclosed position at a similarly stressed bank would be a different story, and Tether has not published an itemised list of its banking counterparties.

Positioning reflects that ambiguity. USDT remains the dominant stablecoin by usage, and most desks treat it as the default dollar leg in crypto trades. The flow into and out of USDT around this news is the cleanest gauge of whether that assumption is shifting. So far, it is not.

Outlook — what to watch next

Three catalysts will determine how this resolves. First, whether EQIBank formally enters liquidation, which would convert Tether from a depositor into a creditor queuing for recovery. Second, whether the California federal court returns any of the seized funds, which would likely end the matter quietly. Third, any disclosure from Tether of the exact amount at risk, or a note in its next reserves report.

The level to watch is the peg itself. USDT near $0.9997 is inside normal trading noise. A sustained move away from $1, held for more than a session, would matter far more than any headline about a small bank. Traders should treat the dollar price of USDT, not the EQIBank story, as the signal that carries information.

Frequently Asked Questions

What does the EQIBank seizure mean for retail USDT holders?

Very little on current disclosures. Tether says its exposure is under 0.034% of total assets, or under $64 million against its Q2 reserves report. Even a full loss would leave the vast majority of reserves untouched. The practical risk for a retail holder is not this bank but the broader question of how quickly an issuer can access cash held across multiple banking partners.

What happens to Tether's funds if EQIBank is liquidated?

Tether would become a creditor in the liquidation and wait in line with other depositors. Recovery would depend on what assets remain after the seized funds are resolved. The bank says the seizure covers about 80% of its cash, and it is contesting the action in a California federal court. A court win for EQIBank would likely resolve the matter without a formal wind-down.

Why did US authorities seize EQIBank's funds?

US authorities seized about $89 million linked to the bank, held through accounts at US payment processor Capstone Ltd. Prosecutors filed a forfeiture complaint in July seeking to keep $84.2 million permanently. EQIBank is challenging the seizure in a California federal court. Tether has not been accused of wrongdoing, and its funds are a separate matter from the forfeiture action.

Bottom Line

Tether's EQIBank exposure is a rounding error, and USDT's peg — not the headline — is the only signal that matters.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. CFD trading carries high risk of capital loss.