**[FT: Circle Once Blocked Crypto Fund Accounts Supported by Tether, Later Backed by Arbitration Ruling]** BlockBeats News, July 15 — According to a report by the *Financial Times*, newly disclosed court documents reveal that stablecoin issuer Circle blocked accounts of the Tether-supported crypto fund Heka Funds at the end of 2023. The reason cited was suspicion that Heka was manipulating the market through large-scale arbitrage operations and aiding Tether in expanding its market share. The documents show that during the 2023 Silicon Valley Bank (SVB) crisis, USDC temporarily fell below its $1 peg. Heka consistently purchased discounted USDC in large quantities and redeemed it with Circle for cash in U.S. dollars. Circle claimed that Heka's redemption volume far exceeded that of other market participants and suspected that the funds ultimately flowed to Tether, helping it expand the USDT market share. Arbitration documents further disclosed that Tether had invested approximately $800 million into Heka, accounting for about 75% of the fund's assets, and waived stablecoin minting fees. The arbitrator found that Heka failed to disclose its relationship with Tether truthfully and was aware that such information would raise concerns for Circle. In 2024, Heka initiated arbitration over the account freeze, seeking approximately $49 million in lost profits. This February, the arbitrator dismissed all of Heka's claims, ruling that it had engaged in malicious conduct and ordering it to pay Circle approximately $166,000 in legal and expert fees. Heka denied allegations of market manipulation and stated that it had never been subject to regulatory investigation for such actions. Circle declined to comment, and Tether did not respond to media inquiries. [Original Link]