Circle has successfully defended against an arbitration claim by Heka Funds, a crypto fund backed by Tether, according to court documents. Circle had blocked Heka Funds' accounts at the end of 2023, accusing the fund of market manipulation through large-scale arbitrage and aiding Tether in expanding its market share. During the 2023 Silicon Valley Bank crisis, Heka Funds purchased discounted USDC and redeemed it for cash, raising Circle's suspicions about the fund's activities. Arbitration documents revealed that Tether had invested approximately $800 million in Heka Funds, accounting for about 75% of the fund's assets, and waived stablecoin minting fees. The arbitrator found that Heka Funds failed to disclose its relationship with Tether, which could have caused concern for Circle. Heka's claim for $49 million in lost profits was dismissed, and the fund was ordered to pay Circle $166,000 in fees. Heka denies any market manipulation, while Circle and Tether have not commented on the matter.