US prosecutors seek $84.2M tied to Tether-linked accounts

The prosecutors of the government are seeking to confiscate the funds worth $84.2 million that were taken from the accounts of the company that allegedly used the accounts to conduct transactions for Tether. This amount is relatively insignificant compared to the balance sheets of Tether; however, this story reveals a lot about the stablecoin market in general.

A forfeiture case built on bank accounts, not wallets

On July 15, the United States Department of Justice filed a civil forfeiture lawsuit against Capstone Ltd., a Montana-based payments company operating under the name of an unlicensed money transmitter in at least six states despite its claims to be an IT services provider to banks. The action takes place in the Eastern District of California and is supervised by Judge Dale A. Drozd.

Notably, the majority of the funds in question were not even stored on the blockchain. From the total sum of 84.2million, the biggest part of the money (79.11 million) was withdrawn from a Wells Fargo Securities account owned by Capstone on September 14. An additional $2.06 million was withdrawn from the JPMorgan Chase account, and $1.86 million was taken from another Wells Fargo Securities account. More than $1.1 million was distributed between two wallets storing USDT, which is the dollar-pegged cryptocurrency issued by Tether. Civil forfeiture allows for seizing funds associated with the crime regardless of the guilty party’s acquittal or indictment.

The named owners of Capstone – Kotaro Shimogori and Mary Jeanne Thompson – were present when the FBI executed the search warrant on their Sacramento residence. According to reports, the company “denies any wrongdoing” and hopes to “resolve this matter quickly.”

Why the amount barely dents Tether

Adjacent to Capstone is EQIBank, a financial institution based in Dominica. According to Tether, the firm helped Tether complete wire transfers but claimed that it had “no knowledge” of the activities under scrutiny and estimated its liability at less than 0.034% of group assets.

These estimates come against the backdrop of sizable figures. As detailed in the Q2 attestation conducted by BDO, the crypto asset management firm reported an asset base of nearly $187.75 billion at June-end, a buffer of approximately $4.11 billion from liabilities, and net operating profit of $1.5 billion for the quarter. Nearly $184.6 billion worth of USDT was in circulation, while the market share of Tether in the stablecoin market was pegged at over 60%. With such figures, the frozen accounts would not have any impact on the issuer.

It is the plumbing behind the case that counts.

Reserve transparency is not payment-rail transparency

Tether releases documentation for what underpins its coin. However, what Tether does not make clear is the chain of banks, payment processors, and correspondent accounts that actually move dollars to fund the minting and withdrawal of USDT. A coin transaction might be able to settle P2P in seconds, but the fiat transaction still goes through specific banks such as Wells Fargo and JPMorgan, and in this case, an obscure bank in the Caribbean. This is what Capstone highlights in relation to Tether and other USDT clones – reserve transparency does not equal payment-rail transparency, and a stablecoin might do very well in the former but fall short in the latter.

In stark contrast, the bank-integrated approach looks totally different. As Cryptopolitan previously reported, BNY Mellon made Circle’s USDC the first stablecoin to launch on its Digital Asset Custody platform in June 2026, thus allowing its institutional clients to mint and withdraw the stablecoin via the regulated custodian that also holds its reserves.

What the research says about the risk

It’s not a structural concern unknown to regulatory bodies. A BIS working paper, “The anatomy of stablecoin transactions,” issued in June 2026, reveals that stablecoins have gone far beyond being merely a tool for peer-to-peer transactions and have become a sophisticated programmable finance system. In January 2026, an IMF working paper “From Par to Pressure” offered a model of how withdrawals from a systemic stablecoin can empty the reserves of the company, prompt asset sales, and reduce sovereign bond prices, leading to a cycle provoking more withdrawals.

Secondly, an IMF working paper issued in March 2026 calculated that a one-percent increase in net stablecoin inflows increases the spread in purchasing the dollar in stablecoins versus spot by 40 basis points and negatively affects the local currency. The April 2026 Global Financial Stability Report of the IMF highlights that the demand for stablecoins may be high in countries with poor fundamentals, increasing currency substitution risks. When the dollar channels through which users obtain access can be blocked by the US courts, the counterparty risk is overseas but the problem hits emerging markets.

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