In December 2023, Circle quietly pulled the plug on Heka Funds, a Malta-based trading firm with deep ties to Tether. The reason: suspected market manipulation designed to benefit USDT at USDC’s expense. The full story stayed under wraps until July 14, 2026, when the Financial Times published findings from the subsequent arbitration.
The arbitrator sided with Circle. Heka had sought $49 million in lost profits. It walked away with nothing.
What Heka was actually doing
Heka Funds, associated with London’s Abraxas Capital Management, was not some small-time operation. The firm ran large-scale USDC redemptions and arbitrage strategies through Circle’s platform, and by its own account, those strategies had delivered returns exceeding 100% since inception.
Tether was historically one of Heka’s largest clients. That relationship never made it into Heka’s disclosures to Circle.
