US federal prosecutors have seized $84mn in bank accounts of Capstone, a Montana-based payments firm linked to Tether and Bitfinex, alleging illegal transfers and unlicensed operations. The civil forfeiture complaint filed in California accuses Capstone of hiding its business from banks and facilitating payments for Tether, the world’s largest stablecoin issuer, and its sister exchange Bitfinex. Prosecutors also allege Capstone assisted fraudsters impersonating FBI agents to convert stolen cash into stablecoins, targeting elderly victims in an impersonation fraud scheme.

The FBI executed search warrants at the Sacramento homes of Kotaro Shimogori and Mary Jeanne Thompson, identified as Capstone’s owners or controlling persons. EQIBank, a Caribbean payments specialist in Dominica, reportedly directed Capstone’s transactions and was used by Tether to access banking services. Tether and Bitfinex stated they are customers of EQIBank but claim no knowledge of Capstone’s alleged fraudulent conduct, noting their assets at EQIBank are limited. A lawyer for Capstone denies wrongdoing, pledges to challenge the forfeiture complaint, and says it has cooperated with investigators. EQIBank filed a motion in June arguing it was misled by Capstone, which it believed was properly registered.

The case underscores Tether’s ongoing struggle to access mainstream banking, despite holding over $140bn in US government debt and operating as a linchpin of the crypto financial system. A 2021 New York attorney-general investigation revealed Tether briefly had no global banking access in 2017. The firm has previously worked with small Bahamas-based banks including Capital Union, Deltec Bank, and Britannia Bank & Trust. Marlin Capital, Tether’s Treasury advisory group, purchased $10mn of EQIBank convertible instruments in 2024, with further investment negotiations led by Zachary Lyons, Tether’s chief investment officer. The civil claim, filed in July, alleges Capstone agreed to work for EQIBank in August 2024, and was incorporated in Montana three weeks later, the only US state with no...