Dominica-licensed bank EQIBank, which has business dealings with Tether, is in serious crisis. According to the Financial Times, in the U.S. Department of Justice's asset seizure action against payment service provider Capstone Limited, approximately 80% of EQIBank's assets have been frozen.
EQIBank's relationship with Tether is related to Marlin Capital Partners. According to reports, Marlin Capital, which has long served as an investment advisor to Tether, invested in EQIBank and promised further investment if it could successfully help Tether open an account with DBS Bank in Singapore.
EQIBank claimed in a document that it established a correspondent banking relationship with DBS Singapore through a company called Clarency. The bank actually relies on Capstone Limited to assist it in holding deposits in the United States and maintaining relationships with U.S. banks.
According to a forfeiture complaint filed in July of this year, Capstone is suspected of misrepresenting the nature of its business to multiple banks, including Wells Fargo, JPMorgan Chase, and Citibank—claiming to be an "application development service" rather than a money services business.
Capstone Limited is indeed registered with FinCEN as a money services business, but only in Montana, not in California where it actually operates, and it did not disclose this to the banks. When negotiating with EQIBank, Capstone also specifically emphasized this registered status, including a document signed on August 20, 2024, by Dominica Bank 1 and Capstone, stating that Capstone "is a FinCEN-registered technology development company and money services business." However, the complaint points out that Capstone's Montana entity was not registered until September 2024, so it could not have already obtained FinCEN registration at that time.
The complaint states that Capstone ultimately transferred hundreds of millions of dollars through its accounts. Specifically, of the $337 million withdrawn from the Wells Fargo x7500 account, nearly two-thirds appears to have flowed to hundreds of individuals and entities representing "Crypto Company 1/Crypto Exchange 1." Another Chase account's "international transfers" also "appear to have been sent to individuals and entities on behalf of Crypto Company 1/Crypto Exchange 1."
"Crypto Company 1" is described as "a foreign entity that issues a stablecoin pegged one-to-one to a corresponding fiat currency." Individuals associated with the company are also affiliated with "Crypto Exchange 1." According to public statements by "Crypto Company 1," its holdings of U.S. Treasury bonds would place it among the largest holders in the world. These descriptions likely point to Tether and Bitfinex.
Capstone also appears to have received "U.S. Treasury securities belonging to a foreign cryptocurrency company," which were transferred into a securities account opened in Capstone's name.
This seizure is a heavy blow to EQIBank. The bank stated in a document that the frozen funds "account for approximately 80% of the bank's monetary assets." The document also noted that due to the seizure, "the FSU has imposed enhanced supervision on the bank and warned of possible further actions, including potential liquidation." The document added: "The bank thus faces a major liquidity crisis. If the bank fails, the years of efforts by its directors, executives, and founders since 2018 will be destroyed."
Some assets listed in EQIBank's document do not appear on the government's forfeiture list. The bank believes that the amount held in one account is higher than the amount seized by the government, but noted that this may be "because Capstone used the portal to misreport to the bank the amount of funds it held on behalf of EQIBank at certain banks." The document also mentions funds at Barclays Bank and Clear Bank, which are not mentioned in the public government seizure.
Kotaro Shimogori's High-Risk Payment Processing Business
Capstone has on many occasions claimed to be led or operated by Mary Jeanne Thompson, but the complaint states that Thompson told the FBI she "has little to do with Capstone." The complaint further states that "her husband Kotaro Shimogori... actually operates Capstone."
Shimogori has a long and controversial history in the payment processing industry. In the 2000s, Shimogori became an agent of Ikessai, Inc. just days after it was named in a lawsuit. The lawsuit was later dismissed, alleging breach of contract related to a payment agreement. The lawsuit also noted that Shimogori was the CEO of another payment company, Okaikei, Inc. During the same period, Shimogori's website had a page dedicated to "card authorization and settlement."
Also in the 2000s, Shimogori served as president of Foreal, Inc. This company was also sued on grounds of contract fraud and ultimately received a default judgment of $589,097.47. Shimogori and Thompson recently declared bankruptcy, listing a $500,000 claim related to that lawsuit. The creditor in that lawsuit also appears on the debt discharge list.
However, this did not stop Shimogori. In 2011, a company called TechnoUnicorn Ltd was established in Hong Kong, later renamed ComCopious Limited, and later became Capstone Limited. This is not the Capstone Limited registered in Montana, obtaining FinCEN registration, and used by EQIBank, nor is it Capstone US Limited, whose director is George Thompson and whose registered address is the same as the correspondence address provided by Shimogori for Trans Global Systems Ltd, nor is it Singapore's Capstone SGP Pte. Ltd., where Shimogori serves as director, nor is it Comcopious California, led by Shimogori. Shimogori is a director of this Hong Kong entity, holding 13,500 of 15,000 shares.
ComCopious Limited (both the Hong Kong and California ones), along with Shimogori, has been repeatedly sued on grounds including fraud, embezzlement, and breach of contract. These lawsuits reveal the types of clients served by Shimogori's companies—as advertised, high-risk clients.
The plaintiffs in the "Life-FX" case include: a company that "sells biochemical compounds online to businesses and scientists engaged in non-clinical scientific research," particularly in the areas of cognition, metabolism, and longevity enhancement; a company that "operates a legal online pharmacy for medicinal cannabis and cannabis-related products"; and several companies that "legally sell cannabis seeds online." Given the regulatory scrutiny in these areas, these businesses clearly represent high-risk clients. The lawsuit also involves iCanPay UK Limited, another company controlled by Shimogori.
The factual pattern of the "Helexo" case is very similar. In the defendants' response supporting their motion, allegations can be seen that "Helexo operates multiple gambling websites that are illegal in California." More strikingly, Shimogori's statement in that case said that "iCanPay assisted Helexo in processing credit card transactions, and iCanPay transferred funds payable to Helexo into a cryptocurrency wallet held by Helexo." Equally disturbing, the lawsuit states that "iCanPay used Shimogori's own HSBC bank account... to fulfill iCanPay's basic obligations."
The factual pattern of the "Fresh Horizons" case is also similar, with equally high-risk clients. Fresh Horizons Limited "is a British Virgin Islands gambling company," which, according to Shimogori's statement, "provides remote gambling services under a license issued by the Kahnawake Gaming Commission." A defense memorandum also accused Fresh Horizons of "operating in a legal gray area through a British Virgin Islands shell company."
The lawsuit also mentions the UK's Pan Digital Network Limited (formerly Comcopious UK Limited), where Shimogori served as a director and had significant influence or control. In addition to this UK entity, there is a Pan Digital Network Ltd registered in California, where Shimogori is the registrant and Thompson is listed as CEO and director. Pan Digital Network is being sued (the lawsuit was filed after Shimogori resigned as director of the UK Pan Digital Network), alleging that "Pan Digital Network Limited has been and continues to operate the Brango gambling platform."
Overall, this recent seizure of Capstone Limited is just a small part of Shimogori's history in the high-risk payment processing industry. Multiple websites, including those that appear to be related to Capstone, as well as Shimogori's personal website, share the same IP address, suggesting shared hosting.
Shimogori's personal website proudly promotes his design awards, patents, and experience as an "e-commerce leader" for companies such as WorkoutUltimate and NIKO NIKO (marketed as "mobile banking that everyone loves"). Workout Ultimate is the predecessor of California's Pan Digital Network Limited. The website niko-niko.co.uk once claimed that it is "owned by Capstone Limited and operated by AuthPay Limited." The domain now has no DNS records, but if a request is made to 78.129.240.8 to resolve the name, it still appears and still references AuthPay. Its meta also states, "NIKO NIKO's secure banking technology was developed under the strategic supervision of Kotaro Shimogori, a fintech pioneer with extensive experience in secure payment systems and cross-cultural digital commerce." nikoniko.co.uk still has DNS records, also references AuthPay, and contains the same text about Shimogori in its source code.
The IP address is also associated with various other websites, some of which mention entity names associated with Shimogori, such as ComCopious, Caikhien, Secher, Capricorn Innovations, and Trans Global Systems Ltd.
The government's forfeiture complaint alleges that some of the funds handled by Capstone Limited are related to fraud. The complaint specifically states, "Chase x6970 was used to receive proceeds of impersonation fraud. In such scams, fraudsters impersonate government or law enforcement officials and coerce victims into transferring funds. At the direction of the fraudsters, victims sent funds to Chase x6970." The complaint describes multiple cases and victims, including a 69-year-old man who received a call from someone impersonating an FBI agent, who told the victim that he "was a person of interest in an international money laundering case." Another victim was told that "she appeared to be involved in a major crime and would be arrested unless she paid 'bail' equivalent to a portion of her assets." A third victim was told by someone impersonating an FBI agent that "his name was linked to an account involving $2.38 million in money laundering."
It is alleged that when Chase inquired about this, "they received a 'Capstone Limited — Contract Services Agreement' dated May 20, 2025, signed between Capstone and a foreign counterparty, stating that Capstone would provide 'software development and related technical services'; an invoice dated November 12, 2025, issued by Capstone to the foreign counterparty for $1.9 million, covering software licensing, website development, advanced web modules, and API integration, among other things; and a bill from the foreign counterparty to Victim 1 for $868,000 in 'service fees.'"
The complaint also alleges that "during a call with Chase, Thompson was unable to answer basic questions and deflected questions to Kotaro Shimogori, who gave contradictory statements about whether the software was provided by Capstone or by a foreign counterparty, and claimed that Victim 1 purchased a medical billing system." "Chase found no genuine software development work and concluded that the software-related claims 'appeared to be fictitious.'"
The complaint states that Capstone's own chief operating officer (unnamed in the complaint) challenged the claim involving software development. He told the Miami Beach Police Department that he "sold $900,000 worth of USDT Tether TRC20 tokens" to Victim 1, sent the tokens to a wallet, and received a bank wire transfer that was subsequently recalled.
The "executive summary" submitted by the COO to the Miami Beach Police states that "the U.S. bank wire transfer was received into Capstone's JPMorgan Chase account for the purchase/settlement of USDT (Tether)... After completing the on-chain delivery of USDT in accordance with the instructions of Capstone's institutional counterparty, the original wire transfer was recalled/claimed to be fraudulent."
Although the COO's identity is unknown, it is worth noting that Capstone US Limited, which is associated with George Thompson and shares an address with a company associated with Shimogori, once appointed Michael Khait as a director, with an address in Miami Beach.
EQIBank, a Dominica-regulated bank that relies on Capstone Limited, was thrown into chaos by this seizure and warned in documents that the seizure accounted for approximately 80% of its funds. This bank, which appears to have taken on some of Tether's reserves, also has fascinating connections, including a relationship with a cryptocurrency token.
The EQIFi project initially promoted that "EQIBank, one of the world's leading digital banks, today announced the launch of EQIFI—a global DeFi alternative to traditional financial products." The company associated with EQIFi eventually issued the EQX token, promoting it as providing governance capabilities for the EQIFi platform and stating that "token holders enjoy lower fees and better rates on transactions and other services on the platform." EQIFi even said that the EQX token would give holders "priority access to EQIBank bank accounts." The token was once listed on KuCoin but has since been delisted.
Beyond Enterprises (sometimes written as Beyond Enterprizes), a company led by Brad Yasar and associated with the token as a "joint partner," is currently suing EQIBank for breach of contract. Notably, the invoices submitted in that lawsuit contain addresses used for USDT payments, and if their dates and amounts are compared with blockchain information, EQIBank and EQITech (SEZC) Limited very likely used USDT for payments. This indicates that Tether is not only a client of EQIBank; EQIBank itself also uses USDT for payments.
Marlin Capital Partners is the company that, according to a Financial Times report, invested in EQIBank and promised additional investment if a relationship with DBS Bank could be established. In a UK court document, Marlin Capital is described as Tether's "de facto financial advisor." In filings submitted to the Bahamas Securities Commission, its chief executive officer, advisor representative, and managing rep are all listed as Zachary Lyons.
Lyons was once announced as Tether's chief investment officer, succeeding Richard Heathcote, who was also an advisor representative of Marlin Capital. Both Heathcote and Lyons previously worked at BankPro, where Heathcote served as CEO. Even earlier, both were also representatives of Deltec Bank and Trust—an entity that played a pivotal role in Tether's history by providing banking services when many companies were unwilling to do so. Lyons is also a board member of Twenty One, which is backed by Tether.
Overall, Tether's direct or indirect reliance on payment processors that appear less than reliable is a recurring theme in Tether's history. The most prominent example may be Tether and Bitfinex's previous relationship with Crypto Capital Corp. Crypto Capital Corp was an unlicensed payment company whose funds were seized, causing serious problems for Tether and Bitfinex.
In that episode, Tether, and especially Bitfinex, relied on this company and its principals to maintain access to the U.S. banking system. The relevant funds were ultimately seized in connection with multiple money laundering and drug proceeds investigations, and the hole this left on Tether and Bitfinex's books became a major problem. After this problem was publicly exposed, the two companies issued the Unus Sed Leo token and raised enough funds to fill the gap.
Now, Tether and Bitfinex appear once again to have lost access to funds after payment processor accounts were seized. The difference is that even if the entire $84 million seized this time belonged to Tether, it would account for less than 0.1% of its reserves.
Tether told the Financial Times that it "was unaware of the Capstone fraud alleged by the Department of Justice." A lawyer for Capstone told the Financial Times that Capstone "denies any wrongdoing and plans to file a motion soon to dismiss the government's civil asset forfeiture complaint and its allegations." "Capstone has been cooperating with the government's investigation and hopes to resolve this matter as soon as possible." The company subsequently did file the aforementioned motion to dismiss.
