The Justice Department seized bank accounts of Montana-based payments business Capstone, alleging that the company was unlicensed, misrepresented its business to U.S. banks and may have made payments on behalf of two unnamed cryptocurrency firms, the Financial Times reported Friday (Sept. 25).

The FT reported, citing unnamed sources, that the two firms are stablecoin issuer Tether and its affiliated exchange Bitfinex.

Capstone illegally moved money at the direction of Dominica-based bank EQIBank, the report said, citing a civil justice complaint filed by the Justice Department in California.

Justice Department prosecutors in the Eastern District of California froze $84 million in Capstone’s accounts at two banks, and the FBI executed a search warrant at the Sacramento, California, home of Capstone owners or controlling persons Kotaro Shimogori and Mary Jeanne Thompson, per the report.

Tether and Bitfinex told the FT, per the report, that they had “no knowledge of the fraudulent conduct by Capstone alleged by the DoJ” and that their “assets held at EQI are limited.”

A Tether spokesperson told PYMNTS in a subsequent email that “Tether’s exposure to EQIBank is minimal, amounting to less than 0.034% of the group’s total assets.”

A lawyer for Capstone said, per the report, that Capstone “denies any wrongdoing and plans to challenge the government’s civil asset forfeiture complaint and its allegations by filing a motion to dismiss shortly. Capstone has cooperated with the government’s investigation and hopes to resolve this matter quickly.”

EQIBank did not comment in the FT article and did not immediately reply to PYMNTS’ request for comment.

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