Federal prosecutors are seeking to confiscate $84.2 million in funds held in accounts belonging to a payments company that allegedly used them to process transactions for Tether. The amount is negligible next to the stablecoin issuer's balance sheet, but the case exposes the banking plumbing that underpins the broader stablecoin market — and serves as a reminder that the dollar side of a dollar-pegged token runs through bank accounts a court order can reach.

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 that, according to the filing, operated as an unlicensed money transmitter in at least six states even as it presented itself to banks as an IT services provider. Money transmission is a regulated activity in the US, with firms generally required to hold state-by-state licenses before moving other people's funds. The case is being heard in the Eastern District of California under Judge Dale A. Drozd.

Notably, most of the funds at issue were never stored on the blockchain. Of the $84.2 million total, the largest share — $79.11 million — was withdrawn from a Wells Fargo Securities account owned by Capstone on September 14. Another $2.06 million was withdrawn from a JPMorgan Chase account, and $1.86 million was taken from a second Wells Fargo Securities account. More than $1.1 million was spread across two wallets holding USDT, the dollar-pegged cryptocurrency issued by Tether. Civil forfeiture allows the government to seize funds connected to an alleged crime regardless of whether the owner is ever indicted or acquitted; owners who dispute a seizure must pursue their claim through the civil case itself.

Capstone's named owners, Kotaro Shimogori and Mary Jeanne Thompson, were present when the FBI executed a search warrant at 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 in the case is EQIBank, a financial institution based in Dominica. According to Tether, the bank helped complete wire transfers but claimed it had “no knowledge” of the activities under scrutiny and estimated its liability at less than 0.034% of group assets.

Those figures sit against a backdrop of far larger numbers. As detailed in Tether's Q2 attestation — a point-in-time review of reserves by BDO, a lighter form of assurance than a full audit — the company reported an asset base of nearly $187.75 billion at the end of June, a buffer of approximately $4.11 billion over its liabilities, and net operating profit of $1.5 billion for the quarter. Nearly $184.6 billion worth of USDT was in circulation, giving Tether a stablecoin market share pegged at over 60%. Against such figures, the frozen accounts will have no measurable effect on the issuer.

It is the plumbing behind the case that counts.

Reserve transparency is not payment-rail transparency

Tether publishes documentation of what backs its coin. What it does not disclose in comparable detail is the chain of banks, payment processors, and correspondent accounts that actually move the dollars used to mint and withdraw USDT. A token transaction may settle peer-to-peer in seconds, but the fiat leg still travels through named institutions — in this case Wells Fargo, JPMorgan, and an obscure Caribbean bank.

That is the gap Capstone exposes for Tether and other USDT clones: reserve transparency does not equal payment-rail transparency, and a stablecoin can perform well on the former while falling short on the latter.

The bank-integrated approach looks starkly 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, allowing institutional clients to mint and withdraw the stablecoin through the regulated custodian that also holds its reserves.

What the research says about the risk

The concern is not unknown to regulators. A BIS working paper, “The anatomy of stablecoin transactions,” issued in June 2026, finds that stablecoins have moved far beyond peer-to-peer transfers and now function as a sophisticated programmable finance system. In January 2026, an IMF working paper titled “From Par to Pressure” modeled how withdrawals from a systemic stablecoin can drain an issuer's reserves, force asset sales, and depress sovereign bond prices, setting off a cycle that provokes still more withdrawals.

A separate IMF working paper issued in March 2026 calculated that a one-percent increase in net stablecoin inflows widens the spread between buying dollars through stablecoins and in the spot market by 40 basis points, while weighing on the local currency. The IMF's April 2026 Global Financial Stability Report adds that demand for stablecoins may be highest in countries with poor fundamentals, raising the risk of currency substitution. When US courts can block the dollar channels through which users gain access, the counterparty risk may sit overseas — but the consequences land on emerging markets.