TechFlow news, July 15, according to the Financial Times, stablecoin issuer Circle banned crypto fund Heka Funds at the end of 2023. Court documents show that Circle accused Heka of using large-scale arbitrage operations to buy discounted USDC and redeem cash from Circle during the 2023 Silicon Valley Bank (SVB) crisis, suspecting that the relevant funds ultimately flowed to Tether to help it expand USDT market share.
Arbitration documents reveal that Tether had invested about $800 million in Heka, accounting for about 75% of the fund's assets, and waived its minting fees, but Heka did not disclose this support relationship to Circle. Heka previously filed an arbitration claim for about $49 million in profit losses due to the account ban, but the arbitrator rejected all its claims in February this year, ruling that Heka engaged in bad faith conduct, and ordered it to pay Circle about $166,000 in legal and expert fees. Heka denied engaging in market manipulation and stated that it was not under regulatory investigation.
