EL7.AI
Crypto•15 July 2026•
1 min read

Circle Suspended Arbitrage Fund Over Secret Tether Ties, Legal Filings Reveal

Key Facts

1Circle suspended minting and redemption services for Heka's Elysium fund in December 2023 over suspected efforts to aid competitor Tether.
2Investigations revealed Tether held a cumulative position of $504.6 million in Heka's Elysium fund as of May 2023.

In a move reflecting the intense rivalry within the stablecoin market, Circle suspended minting and redemption services for Heka's Elysium fund in December 2023. This decision followed suspicions that the fund was being utilized to aid its primary competitor, Tether. According to reports, Circle invoked its master services agreement to protect its business interests after identifying suspicious liquidity patterns.

Investigations revealed that Tether held a cumulative position of $504.6 million in the Elysium fund as of May 2023, with some reports suggesting total exposure reached $800 million. This dispute highlights the strategic battle between USDC and USDT, as both entities vie for dominance over arbitrage channels that are critical for maintaining dollar pegs.

Looking ahead, traders are monitoring the impact of these disclosures on institutional confidence in arbitrage funds linked to stablecoins. Federal Reserve's Monetary Policy Report scheduled for July 10, 2026, which may influence liquidity standards across the digital asset sector.