Tether Discloses Limited Exposure to Seized EQIBank Assets
TREE NEWS reports: Tether has moved to reassure markets after reports that assets held at EQIBank, a Dominica-licensed offshore bank, were subject to seizure. The stablecoin issuer said its exposure to the bank is capped at roughly $64 million, representing less than 0.034% of the group’s total assets. Based on the $187.75 billion in group assets Tether disclosed in June, that figure implies a maximum hit of about $64 million — a rounding error against a balance sheet dominated by U.S. Treasuries and cash equivalents.
Why the Numbers Matter
The disclosure is the latest in a series of transparency gestures from Tether, which has faced years of scrutiny over the composition and custody of its reserves. By quantifying the EQIBank exposure against total assets, Tether is signaling that even a worst-case outcome at a single counterparty would not threaten its peg or redemption capacity.
- Scale: A $64 million exposure against $187.75 billion in assets is roughly 3.4 basis points.
- Buffer: Tether has consistently reported excess reserves above its liabilities, which would absorb a loss of this size.
- Precedent: The company has previously disclosed and written down exposure to troubled counterparties, including in the Celsius and FTX episodes.
Counterparty Risk in Offshore Banking
The episode highlights a persistent structural issue for crypto firms: reliance on lightly regulated offshore banks for fiat rails. EQIBank has positioned itself as a crypto-friendly institution, offering accounts to exchanges, funds and token issuers. When such banks run into legal or regulatory trouble, clients can find assets frozen with little recourse. For Tether, the concentration is small; for smaller crypto businesses banking with the same institution, the impact could be far more serious.
What to Watch Next
Investors will want details on whether the seized assets are frozen, attached or merely under review, and whether Tether expects any recovery. The company’s next attestation report will be the key test: if the EQIBank line item is marked down or written off, it will show how the issuer handles counterparty losses in practice. More broadly, the incident adds pressure on stablecoin issuers to diversify banking relationships and to disclose counterparty exposure with greater granularity — a direction regulators in both the U.S. and EU are already pushing.
For now, the market reaction has been muted, and Tether’s peg has held. But the event is a reminder that in crypto, the weakest link is often not the code — it is the bank on the other side of the wire.
