A U.S. government seizure of bank-account assets from a California company has highlighted the risk that Tether still relies on unstable financial intermediaries to process transactions. According to Sina Finance, Tether said it was an EQIBank customer and that its assets at the bank were limited.

The article said Tether holds more than $100 billion in U.S. Treasuries, most of them custodied by investment bank Cantor Fitzgerald, which was once led by U.S. Commerce Secretary Howard Lutnick. It also said Tether has long struggled to open accounts directly at major U.S. banks and has instead used third-party firms to connect to the traditional banking system.

According to court filings, EQIBank used Sacramento-based Capstone Limited to hold funds and move customer money. The U.S. Department of Justice seized assets in those accounts in July, and government lawyers said the funds were worth about $90 million. Capstone allegedly told banks it was an information technology company, while in fact it moved millions of dollars on behalf of a bank and a stablecoin company.

EQIBank has sued to recover the seized assets, saying the frozen funds represented about 80% of its total assets and put the bank at risk of collapse. Tether said its assets at EQIBank accounted for less than 0.034% of group assets and that it had enough funds to cover any potential loss. Capstone’s lawyer said the company denies wrongdoing and plans to challenge the seizure.