Tether’s Bank Partner Facing Lawsuit Over Alleged Unpaid Assets
A lawsuit has been filed against Tether’s bank partner, Britannia Financial, over claims that it failed to fully pay for revenue-generating assets related to a large deposit from Tether. According to reports from the Financial Times, Arbitral International, a company registered in the British Virgin Islands, sued Britannia over a $1 billion deposit from Tether in the High Court of Justice in London in 2023.
The lawsuit is related to Britannia’s acquisition of Arbitral’s Bahamas-based brokerage business, known as Arbitral Securities, which was announced in October 2021. According to the agreement, Britannia Financial was supposed to pay an additional sum based on the revenue-generating assets held by Arbitral Securities a year after the sale, including the clients introduced by Arbitral or related parties.
Tether opened an account with a subsidiary of Britannia Financial in November 2021. The bank was introduced to Tether by Aldo Mazzella, a “professional introducer” believed to have had a commercial relationship with Tether since around 2017. However, Arbitral argued that an executive at Arbitral Securities also played a role in the partnership between Britannia and Tether.
Britannia Bank and Trust was added by Tether as a Bahamas-based private bank to process dollar transfers on its platform, according to Bloomberg. Tether has been steadily gaining momentum with USDT’s value hitting a new high at $88 billion, up 33% since the beginning of 2023, contributing to its $90 billion market capitalization. This growth is attributed to the market excitement around the potential approval of a spot Bitcoin exchange-traded fund and increasing demand in emerging markets like Brazil.
Hot Take: Tether’s Bank Partner Facing Lawsuit May Impact Crypto Market Stability
The legal dispute between Britannia Financial and Arbitral International could shake the stability of the crypto market, potentially affecting Tether’s standing and investor confidence. The outcome of this lawsuit may also set a precedent for future banking partnerships within the crypto industry, influencing how stablecoin providers and financial institutions conduct business. As the case unfolds, the market will be closely watching how Tether and Britannia Financial respond and the potential implications for the broader cryptocurrency landscape.
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