The stablecoin cold war just got a lot less cold. Circle, the company behind USDC, banned a Tether-backed investment fund from its platform in late 2023 over concerns that the fund was engaging in trading activity designed to manipulate markets in favor of Circle’s biggest rival.
The fund fought back with a $49 million arbitration claim. It lost. And now the details are public, offering a rare window into just how aggressively the two dominant stablecoin issuers are competing for control of a market worth roughly $307 billion.
What happened with Heka Funds
The fund in question is Heka Funds, a Malta-based investment vehicle managed by London’s Abraxas Capital Management and backed by Tether. Circle determined that Heka’s trading patterns on its platform looked suspiciously like market manipulation, specifically the kind that would benefit Tether at Circle’s expense.
That’s exactly what Circle did. It banned Heka Funds from its platform entirely.
