The US Department of Justice filed a civil forfeiture complaint on July 15 seeking to seize $84.2 million from accounts tied to Capstone Ltd., a Montana-based payments firm alleged to have operated as an unlicensed money transmitter. The complaint, lodged in the Eastern District of California before Judge Dale A. Drozd, asserts that Capstone moved funds for Tether without the required regulatory license while presenting itself to banks as an ordinary IT services company. Prosecutors identified Kotaro Shimogori and Mary Jeanne Thompson as the owners of Capstone, which allegedly conducted business in at least six states.
The seized assets include $79.11 million withdrawn from a Wells Fargo Securities account on September 14, alongside smaller sums held at JPMorgan Chase and in two USDT wallets. Capstone is linked to EQIBank, a Dominica-licensed digital bank that prosecutors claim directed the movement of these funds. While Tether confirmed that EQIBank processed its wire transfers, the stablecoin issuer stated it had no knowledge of the alleged misconduct and estimated its exposure at less than 0.034% of group assets. Capstone’s attorney denied any wrongdoing, and both Capstone and EQIBank have filed innocent-owner defenses against the seizure.
This enforcement action highlights the persistent regulatory friction between traditional banking compliance standards and the operational infrastructure supporting major crypto entities. By targeting Capstone as an unlicensed money transmitter, the DOJ underscores that intermediaries facilitating stablecoin transactions remain subject to strict state-level licensing requirements, regardless of their self-presentation as technology providers. The involvement of major financial institutions like Wells Fargo and JPMorgan Chase in holding these funds suggests that legacy banks may still be exposed to significant legal risk when servicing crypto-linked payment processors, even if those processors obscure their true function through misrepresentation.
For the broader market, the case illustrates the fragility of offshore banking relationships within the crypto ecosystem. EQIBank’s warning that losing these funds could trigger liquidation reveals how concentrated asset holdings can create systemic vulnerabilities for smaller, jurisdictionally distinct banks serving the sector. Although Tether minimized its direct exposure, the incident reinforces the need for rigorous counterparty due diligence among institutional adopters. Regulators are increasingly willing to use civil forfeiture mechanisms to disrupt payment rails they deem non-compliant, signaling that operational opacity will not shield firms from aggressive legal intervention.
