Lawsuit Targets Britannia Financial Over Tether Deposit as USDT Nears $90bn Cap
Summary:
Facing a lawsuit, Britannia Financial, Tether's banking partner, allegedly failed to pay for income-generating assets linked to a substantial deposit from Tether, according to Arbitral International. The dispute emerges from Britannia's acquisition of Arbitral's Bahamas-based brokerage, with the understanding that Britannia would pay an additional sum determined by the profit-generating assets a year post-sale. Amid this, Tether's stablecoin, USDT, is nearing a $90 billion market cap, fueled by potential Bitcoin exchange-traded fund approval and growing demand in emerging markets.
Britannia Financial, the banking associate of Tether, is allegedly embroiled in a legal dispute for allegedly failing to cover the full worth of income-generating assets linked to a substantial Tether deposit. Arbitral International, a firm incorporated in the British Virgin Islands, has instigated legal proceedings against Britannia concerning a $1 billion deposit from Tether, as revealed by the Financial Times on November 21, referencing court records submitted to London's High Court in 2023.
The litigation stems from Britannia's acquisition of Arbitral's brokerage business, Arbitral Securities, based in the Bahamas. Britannia disclosed this in October 2021, integrating the acquired business into its own, Britannia Securities.
The Financial Times suggests that Britannia and Arbitral had an agreement wherein Britannia Financial would compensate an additional amount determined by the quantity of income-producing assets Arbitral Securities had a year after the acquisition. It was reputedly agreed this included the clients initially referred by Arbitral or associated entities.
As the report cites from court filings, Tether opened a business account with a Britannia Financial subsidiary in November 2021. Britannia Financial was allegedly introduced to Tether by Aldo Mazzella, portrayed as a "professional introducer" and believed to have maintained a business relationship with Tether since about 2017. Conversely, Arbitral contends that an Arbitral Securities executive also played a part in the Britannia-Tether collaboration.
This revelation follows a previous Bloomberg report that Tether had incorporated Britannia Bank and Trust, a Bahamian private bank, to handle dollar transfers on its platform. Reportedly, other partners included Deltec Bank and Capital Union Bank.
Paolo Ardoino, Tether's Chief Technology Officer and incoming CEO, has reportedly claimed that the stablecoin firm has robust connections with more than seven banks.
At the time of reporting, neither Tether nor Britannia Financial had responded to requests for comment from Cointelegraph.
Tether's stablecoin, USDT, has been making significant strides in the market, and has been edging towards a $90 billion market capitalization, as per CoinGecko data. On November 20, the value of USDT touched another record at $88 billion, a surge of 33% since the start of 2023.
According to Tether, two main factors contributed to USDT adding over $20 billion in market cap in 2023. This includes the ongoing market buzz around the potential approval of a Bitcoin exchange-traded fund, and the booming demand from emerging markets, such as Brazil.
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Published At
11/21/2023 1:14:49 PM
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