A court case has revealed unique insights into Tether’s relationship with UK-based investment banking firm Britannia Financial, as High Court filings show the stablecoin issuer deposited over $1 billion with its subsidiary.
On Tuesday, the Financial Times reported that documents in a dispute between Arbitral International and Britannia Financial show Tether deposits at the heart of the case. Arbitral claims Britannia didn’t pay all of an agreed-upon sum for a Bahamas-based brokerage it sold the firm in June 2021.
Both parties have attested that there was an agreement to pay an extra sum a year after the sale, based on the amount of profitable assets the brokerage held — including from clients Arbitral brought in.
Under that agreement, Arbitral argues, Tether’s $1 billion deposit would entitle the firm to the extra sum because it was made within the year timeframe. Only, Britannia Financial believes that Tether put the funds in its subsidiary based in London, Britannia Global Markets — not in the Bahamas-based brokerage in question. According to filings, this is because Tether “wanted its assets to be held in the UK rather than in the Bahamas.”
It should be noted that Tether has been tied to three Bahamas-based banking partners: Deltec Bank & Trust, Capital Union Bank, and Britannia Financial’s very own Britannia Bank & Trust. Tether’s relationship with the latter became known to the public at the end of August.
What’s more, the firm states that it met Tether through “a professional introducer” named Aldo Mazzella, whom it thought had ties to Tether since 2017. But Arbitral claims that one of its people helped in the introductions, too.
Britannia Global Markets was founded by Venezuelan-Italian financier Julio Herrera Velutini. Through Britannia Financial, Herrera has donated £500,000 ($625,000) to the Tories since Boris Johnson became prime minister, according to the FT, and the firm sponsored the 70-year anniversary event of the late Queen Elizabeth II’s accession to the throne. In total, Britannia Financial has donated almost $800,000 to the Conservatives since 2019.
Herrera was charged by the US Department of Justice with conspiracy, federal programs bribery, and honest services wire fraud, for allegedly providing over $300,000 in campaign funding to the former governor of Puerto Rico ahead of the 2020 election, who was arrested for accepting bribes while in office.
Herrera Velutini has vehemently denied the charges. Since pleading not guilty, there have been no updates to the case. However, Herrera has stepped down from Britannia Financial and almost every other UK company he was associated with. He has also fired the group of auditors that Britannia shared with Tether, BDO.
Herrera Velutini’s 26-year-old son, Julio Cesar Herrera, is the current owner of Britannia Financial.