Tether funds stuck at EQIBank raise reserve safety issues
7 Stablecoins Tether says less than 0.034% of its assets are stuck at EQIBank, which faces liquidation after a U.S. asset seizure. The exposure is minimal, but the incident raises stablecoin reserve safety concerns.
Tether has confirmed that a portion of its funds is stuck at EQIBank, an offshore banking partner now facing liquidation risk after U.S. authorities seized about $89 million—roughly 80% of EQIBank’s cash. Tether stated its exposure is minimal, representing less than 0.034% of its total assets, or under $64 million based on its latest balance sheet. The company emphasized that this limited exposure poses little immediate risk to its reserves or the stability of USDT, which continues to maintain its peg. However, the incident has raised concerns about the concentration of Tether’s reserves in offshore banks and the broader implications for stablecoin counterparty risk. As EQIBank’s legal proceedings continue, the outcome will determine the recoverability of Tether’s trapped funds. The episode has prompted renewed scrutiny of the banking partners used by stablecoin issuers and highlighted the importance of transparency and diversification in reserve management.
