Tether billion-dollar deposit in UK bank sparks legal showdown: FT News ▸ UK ▸ Tether ▸ Stablecoins
Tether billion-dollar deposit in UK bank sparks legal showdown: FT
Tether's financial management practices has faced scrutiny from the authorities.
1 min read
Updated: Nov. 22, 2023 at 9:54 am UTC
Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.
Tether, the USDT stablecoin issuer, deposited approximately $1 billion into the U.K. subsidiary of Britannia Financial Group in November 2021, Financial Times reported today, Nov. 21, citing court documents.
This revelation emerged amid the ongoing legal clash between Britannia Financial Group and Arbitral International. Arbitral filed a lawsuit against Britannia earlier this year in London, alleging the bank’s failure to fulfill payment obligations for a Bahamas-based brokerage it acquired in June 2021.
Post the acquisition, both parties agreed on additional fees based on revenue-generating assets for a year, encompassing clients introduced by Arbitral or other entities.
Arbitral’s legal filing accuses Britannia of non-payment related to the $1 billion Tether deposit, which occurred within a year of Britannia purchasing the brokerage.
However, Britannia refutes the claim, saying the deposit was made to its London-based subsidiary, which is distinct from the brokerage acquired from Arbitral.
Moreover, conflicting narratives exist between the firms regarding the origin of the Tether deposit. Britannia attributes the link to Tether through Aldo Mazella, a professional introducer, while Arbitral contends that an executive from its former brokerage played a role in the process.
Tether has yet to respond to CryptoSlate’s request for comment.
Tether’s USDT is a digital asset pegged to the U.S. dollar and is the world’s largest stablecoin. USDT has a circulating supply of more than 88 billion and controls around 70% of the market, according to CryptoSlate’s data.
Due to its significant role in the cryptocurrency industry, the company’s financial management practices have faced questions, demanding it enhance transparency regarding the reserves backing the USDT stablecoin.
However, Tether has maintained publicly that it remains fully backed, with its incoming CEO Paolo Ardoino promising to publish real-time attestation of its reserves in the future.
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Launched in 2014, Tether is a blockchain-enabled platform designed to facilitate the use of fiat currencies in a digital manner.
Tether Limited
Tether Limited is the company that introduced Tether (USD₮ or USDT), an asset-backed cryptocurrency stablecoin, in 2014.
Paolo Ardoino joined Bitfinex at the beginning of 2015 and now serves as Chief Technology Officer.