Britannia Financial, the banking partner of Tether, is reportedly facing legal action amid allegations of failing to fulfill the entire payment for revenue-generating assets connected to a substantial deposit from Tether.
As per court documents filed in the High Court of Justice in London in 2023, Arbitral International, a company registered in the British Virgin Islands, has initiated a $1 billion lawsuit against Britannia over a deposit made by Tether.
The legal dispute revolves around Britannia’s acquisition of Arbitral’s brokerage business, Arbitral Securities, based in the Bahamas. This acquisition, announced in October 2021, saw the integration of Arbitral Securities into Britannia’s own brokerage, Britannia Securities.
The lawsuit contends that Britannia and Arbitral had an agreement where Britannia Financial was supposed to make an additional payment based on the number of revenue-generating assets held by Arbitral Securities one-year post-sale. This was to include clients initially introduced by Arbitral or related parties, as outlined in the agreement.
According to the recent report, Tether established an account with a Britannia Financial subsidiary in November 2021. The introduction reportedly came from Aldo Mazzella, labeled a “professional introducer,” known to have had a commercial relationship with Tether since around 2017. Conversely, Arbitral asserted that an executive at Arbitral Securities also played a role in the partnership between Britannia and Tether.
This development follows a prior Bloomberg report revealing Tether’s addition of Britannia Bank and Trust as a Bahamas-based private bank for processing dollar transfers on its platform. Tether’s network of banking partners reportedly includes Deltec Bank and Capital Union Bank.
Despite repeated requests for comment from Cointelegraph, both Tether and Britannia Financial have yet to respond.
Tether’s stablecoin, USDTUSD, has been steadily gaining traction in the market, approaching a $90 billion market capitalization, reaching $88 billion on Nov. 20, marking a 33% increase since the beginning of 2023. Tether attributes this growth to factors such as ongoing market enthusiasm surrounding the potential approval of a spot Bitcoin exchange-traded fund and rising demand in emerging markets like Brazil.