EQIBank Seizure: $84M US Freeze Puts Offshore Bank at Collapse Risk

The EQIBank seizure has turned a quiet civil forfeiture case in a California federal court into a wake-up call for anyone who keeps serious money in a small offshore bank. US prosecutors froze roughly $84.2 million held by Capstone Ltd., the Montana payments firm that moved dollars for Dominica’s EQIBank, and the bank now says it could face liquidation.

SACRAMENTO, United States – 26 September 2026

The complaint dates from 15 July. What changed this week is that Reuters and the Financial Times put names to it, and Tether confirmed some of its own cash sits at EQIBank. An obscure docket became a story about what happens when your bank’s dollars live inside somebody else’s US account.

EQIBank is a digital bank licensed under Dominica’s Offshore Banking Act and supervised by the country’s Financial Services Unit. It serves non-resident clients, many of them in crypto. According to EQIBank, the frozen funds amount to about $89 million, or roughly 80% of its total monetary holdings.

What Happened in the EQIBank Seizure?

The EQIBank seizure is a US civil forfeiture action against about $84.2 million held by Capstone Ltd., a Montana payments company that processed wire transfers for Dominica-based EQIBank. Prosecutors in the Eastern District of California filed the complaint on 15 July, alleging Capstone ran an unlicensed money transmitting business and misled its US banks.

According to the complaint, as reported by Reuters and Decrypt, Capstone told Wells Fargo and JPMorgan Chase it was an IT services company. Prosecutors say it was really moving money for “hundreds of individuals and entities” at EQIBank’s direction, and that some of the flows were tied to an FBI impersonation scam whose proceeds were converted into stablecoins. The case sits before Judge Dale A. Drozd under docket number 2:26-cv-02476.

Capstone’s lawyer says the company denies any wrongdoing and will fight the complaint. Tether says it had no knowledge of Capstone’s alleged conduct and puts its EQIBank exposure below 0.034% of group assets. Prosecutors haven’t accused Tether of anything.

Where the Seized Money Sat

Almost none of the money was in Dominica. It sat in ordinary American accounts, where a US court could reach it with one filing. The forfeiture docket lists the assets as follows.

Read that last row twice. A licensed bank says four-fifths of its liquid money is stuck in someone else’s frozen account. EQIBank warned publicly on 9 September that continued loss of the funds could force liquidation, according to reporting by CoinDesk and Crypto Briefing.

Why Can a US Court Freeze an Offshore Bank’s Money?

A US court can freeze an offshore bank’s money because almost every US dollar an offshore bank holds eventually sits in an account at an American bank or payments firm. That’s correspondent banking. Once those dollars touch US soil, US forfeiture law applies, whatever the offshore licence says about privacy or local jurisdiction.

This is where people get burned. Clients tell us they picked a bank in a small jurisdiction precisely because it felt out of reach. On paper, that’s true. In practice, a bank with no direct correspondent relationship often routes dollars through a fintech middleman, and that middleman is the weak link. When we review banking setups for clients, the first question we ask is who actually clears the bank’s dollars. Surprisingly few people know the answer.

Big US banks have spent a decade de-risking Caribbean and crypto-facing clients, so smaller offshore banks lean on processors. We saw a similar squeeze with non-resident LLC bank account freezes. Every extra layer is another party whose compliance problem can become yours.

Who’s Affected by the EQIBank Seizure?

The EQIBank seizure mainly affects EQIBank’s depositors, whose dollar balances depend on money the bank can’t currently reach, plus the crypto firms that used EQIBank for fiat wires, including Tether, which confirmed it banks there, and reportedly Bitfinex. No depositor has been accused of wrongdoing, but a liquidation would put their claims in a queue.

For clients of other small offshore banks, the risk is indirect but real. If your bank relies on a single processor for US dollar access, a freeze at that processor can halt your wires overnight. Dominica has a respectable company registry, and Dominica IBC formation remains a solid option for many structures. The weakness here sits in one bank’s payment plumbing, a problem you can plan around.

I’ve watched this play out before with smaller Caribbean banks: a processor gets flagged, the dollars stop, and depositors find out from the news. The fix is structural. Pair a sensible offshore company formation with more than one banking relationship, in more than one currency.

How to Protect an Offshore Bank Account From Correspondent Risk

Protecting an offshore bank account from correspondent risk comes down to three habits: keep dollar balances at banks with direct, named US correspondents, spread significant funds across at least two institutions in different jurisdictions, and hold only operating cash at small digital banks. Each habit limits how much a single freeze can trap.

Bottom line: the EQIBank seizure is a lesson about concentration. Offshore banking still works well for people who spread their money sensibly. A bank’s licence tells you who regulates it. Its correspondent chain tells you who can freeze it.

EQIBank Seizure FAQ

For more on keeping money reachable when banks tighten up, browse our offshore bank accounts coverage.