Not a great look for crypto.
By Joe Wilkins
Published Sep 25, 2026 5:34 PM EDT
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Ask any crypto bro for the digital equivalent of the gold standard, and they’ll likely tell you about Tether — though a recent raid by the Department of Justice is throwing that characterization into question.
Fresh reporting by the Financial Times revealed that the US Department of Justice has seized millions of dollars from a collection of bank accounts and crypto wallets linked to the fintech company Tether Limited.
The company is famously the issuer of the “stablecoin” Tether, a digital currency meant to maintain a relatively stable value based on the exchange rate of the US dollar. The company Tether was one of the subjects of a massive FBI probe, which discovered an unlicensed payment processing business, Capstone, that is now alleged to have placed hundreds of millions of dollars worth of illegal transfers.
The convoluted case also involves Bitfinex, a cryptocurrency exchange owned by Tether’s parent company, iFinex.
Basically, the payment processor Capstone is alleged to have misrepresented itself as an information technology firm in dealings with legitimate banks like Wells Fargo and JPMorgan Chase. In reality, according to the allegations, the company was engaged in a massive fraud scheme, in which people affiliated with Capstone misrepresented themselves as FBI agents in order to scam the elderly, whose money was then converted into crypto, Reuters reported.
Based on the information available so far, the two crypto companies seem like unwitting bystanders rather than willing participants. Tether’s connection came by way of a relationship with a legal off-shore firm called EQIBank, which handled the flow of Tether’s money through Capstone.
In statements to the FT, both Tether and Bitfinex insisted they are merely “customers of EQIBank,” and had “no knowledge of the fraudulent conduct by Capstone alleged by the DoJ.”
The entire thing shows how sketchy the crypto market still remains in 2026, even as it holds $140 billion of US government debt. Even with support from the president of the United States, Tether is clearly struggling to tap into the most rudimentary financial infrastructure.
Tether’s entire connection with EQI — and therefore with the alleged fraudsters at Capstone — came about as the crypto firm tried desperately to open a bank account with the Development Bank of Singapore, a major institution in the global financial space.
According to the FT, Tether offered to make a handsome investment in EQI if it could manage the “successful opening of at least one bank account” with the Singaporean financier. That failed to materialize before the FBI probe blew everything out in the open, and as the Development Bank of Singapore told the FT: “DBS has never had appetite for association with illicit funds or inappropriate dealings.”
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