Tether in Legal Dispute Over Banking Partner
Tether (USDT), the world’s largest stablecoin issuer, is embroiled in a legal battle involving its banking partner, Britannia Financial. The British Virgin Islands corporation, Arbitral International, has filed a lawsuit against Britannia Financial over a $1 billion deposit made by Tether.
Tether’s Banking Selection Backfires
Financial Times reported that Tether has an over $1 billion deposit with a subsidiary of Britannia Financial Group. This deposit is at the center of the ongoing legal dispute. The stablecoin issuer’s decision to bank with Britannia Financial, founded by Julio Herrera Velutini, has been controversial, given the banker is facing bribery allegations. However, the financial group itself has not been accused of any wrongdoing.
Previously, the Commodity Futures Trading Commission (CFTC) accused Tether of misleading statements regarding the dollar reserves backing its stablecoins. Moreover, the New York attorney-general investigated the company for concealing significant losses and facing challenges in accessing banking services globally.
Arbitral International alleges that Britannia Financial failed to pay the full price for a brokerage it sold to the group. The claim centers on the additional payments based on revenue-generating assets held by the business a year after the sale, to which Tether’s deposit is believed to fall within.
Britannia Financial’s Ties With Tether
According to the report, Tether was introduced to Britannia Financial by Aldo Mazzella, a professional introducer with a long-standing commercial relationship with the crypto firm. The decision to keep its assets in the UK rather than the Bahamas, where Britannia Financial acquired a bank, has come under scrutiny.
The legal battle has also brought to light Britannia Financial’s ties to Tether, with the bank’s founder, Julio Herrera Velutini, having made considerable donations to the UK’s Conservative party and sponsored events commemorating Queen Elizabeth II’s jubilee.
Hot Take: Tether’s Future Amid Legal Battles
The ongoing legal dispute between Tether, Britannia Financial, and Arbitral International has significant implications for Tether’s reputation, the stability of the stablecoin market, and the broader regulatory landscape surrounding digital assets. The outcome of this litigation will be closely watched to see its impact on Tether’s operations and the digital currency market in general.
Featured image from Shutterstock, chart from TradingView.com
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