The Tether whale amongst us

Simon Grima. Heka director.

It would be interesting to know whether the recent FIAU fine of Bank of Valletta made any reference to the Heka fund which apparently is one of the main buyers of Tether. Tether is the biggest stable coin in the world and is mainly used by people who don’t have access to Dollars and Euros. People who want to buy Bitcoin or other crypto but don’t have access to Euros or Dollars, usually buy Tether to then use it to buy Bitcoin or other crypto.

Recently, David Canellis made an excellent investigation to discover who are the major buyers of Tether. He discovered that one of the major buyers of Tether is a fund called Heka, which is related to Abraxas, a fund in London, and is based in Malta and held as SICAV at the Bank of Valletta. The people who run it seem to be Maltese academics, mainly Simon Grima and Frank Chetcuti Dimech who are listed as

Frank Chetcuti Dimech. Heka director.

directors. They may actually not even run the fund as they may also be used as proxies to hold the fund while they wouldn’t even be aware of what the fund is actually doing. Apparently, Heka which is based in Malta bought $1.5 Billion of Tether, practically buying around 1.5% of the whole supply of Tether.

I’m a bit confused on why they would need to buy so much Tether given that they are based in Europe and have direct access to Euros and Dollars. One of the ways they may be using all of that Tether is to stake it and earn passive yield out of it but I also find it strange that a fund would buy so much Tether to gain stable yield when there are many other ways to get stable yield in a much safer way. I’m a crypto holder myself. If you were to ask me whether you think it’s fine to buy Tether to stake it, I would tell you yes, at a risk of course, and I would not do it myself with my own money as I’d prefer much safer options.

Now, I’m not implying that Heka is doing something wrong. I’m saying that what they are doing is strange and from my stupidity, I can’t understand it. I have sent them emails asking them about their operations and I will share their reply if I get any. This is a story in itself even if they are not doing anything wrong since it’s quite something to be a Tether whale. Tether whales are important for the crypto industry as they provide liquidity to the market.

But this story also flies in the face of BOV which refuses to service the crypto industry and puts a lot of restrictions on its retail clients in buying crypto. Sure, institutional funds will probably be allowed to buy and hold crypto in their funds, and probably BOV wouldn’t have a problem with that, but this is not just any fund that is holding crypto. This is a whale that holds some significant importance in the crypto market.

So, BOV will not open an account for you if you want to use it to buy crypto, but they will open an account for you if you want to use it for gambling purposes and they will also serve Tether whales. Very consistent.


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