Tether’s banking partner, Britannia Financial, is facing a lawsuit.
Tether faces an increasingly skeptical environment regarding its transparency.
Tether, the issuer of the USDT stablecoin, has deposited more than $1 billion with a subsidiary of investment bank Britannia Financial, which is in litigation.
A publication This is reported by the newspaper “Financial Times”. Tether placed the funds in a subsidiary of the British company, according to documents filed with the High Court in London. And with it a rare insight into the banking relationships that the USDT issuer has established.
According to court documents, Tether opened an account with the British company in November 2021. More than a billion dollars are at the center of a legal dispute Previously unreported cases between Britannia Financial and Arbitral International, a company registered in the British Virgin Islands.
Earlier this year, Arbitral filed a lawsuit in London alleging Britannia Financial failed to pay the full price for a Bahamas-based brokerage that sold to the group in June 2021.
According to the aforementioned publication, both parties provided documents evidencing an agreement under which Britannia Financial would pay an additional amount based on the amount of income-producing assets the company had one year after its sale. This includes customer funds originally submitted by Arbitral or related parties.
The arbitrator argues that he is owed money under this agreement because The Tether deposit was made within 12 months of the company’s sale. However, Britannia Financial denies owing more money and claims that Tether put the funds into its London-based subsidiary and not the brokerage firm that bought it from Arbitral.
In its statement of claim, Britannia Financial said Tether initially considered putting some of its funds into the Bahamas-based brokerage firm it acquired from Arbitral, but decided that it would “hold its assets in the United Kingdom and not in the United Kingdom.” wanted”. Bahamas,” the documents say.
The news comes a few months later Will be informed The Tether founded Britannia Bank and Trust as a private bank based in the Bahamas Process dollar transfers on its platform. Other banking partners would be Deltec Bank and Capital Union Bank.
Both Arbitral and Britannia stand by their claims and are continuing the legal battle to resolve the situation. Meanwhile, Tether would be in a difficult position trying to find a solution to release the funds without seriously impacting its users.
Tether has been the subject of controversy in recent years for allegedly not being fully backed by U.S. dollar reserves, raising doubts about the stability of its largest market-cap stablecoin.
However, Tether said it has more liquidity than ever before. The latest quarterly audit conducted by accounting firm BDO revealed that the company holds 85.7% of its reserves in cash and cash equivalents. Of this, US Treasury bills account for $72.6 billion.
Put simply, these numbers suggest that Tether could face a situation where a large majority of USDT holders decide to convert or redeem their tokens and still remain solvent.