FTX Scandal: Deltec Bank Allegedly Gives Secret Loans To Print USDT Tether

FTX, a crypto exchange that went bankrupt. (Photo; Doc. India Daily)

JAKARTA - FTX scandals are heating up. A new lawsuit reveals that Deltec Bank, a partner bank of FTX, is suspected of providing secret loans to Alameda Research, a partner company FTX, to print and sell Tether (USDT), the world's largest stablecoin.

The lawsuit refers to a Bloomberg report that recounted a court case in Florida, United States, filed on Friday 16 February. In the case, there was a statement from Caroline Ellison, former CEO of Alameda Research, who admitted that his company could create USDT without having to pay in advance.

"Alameda can create USDT with credit through the Unofficial Deltec Line of Credit and sell the USDT for profit before having to fund the purchase by depositing the US Dollar (USD) into the Deltec Tether account," Ellison said, as quoted by Bloomberg.

According to Bloomberg, this agreement is a short-term credit line and a "three-day tolerance period." This means that Alameda can receive USDT tokens from Deltec a few days before paying them USD. Then, Alameda sold the USDT in the crypto market to make a profit.

Deltec allegedly did not offer this agreement, which was kept secret, to other customers. In addition, Deltec is also accused of helping misuse funds between FTX and Alameda, although it has sufficient reasons to be suspicious of the transfer.

It is said that Deltec received FTX customer deposits and transferred the funds to Alameda. In addition, Deltec also freed Alameda from several rules and gave priority to the withdrawal of Alameda during the crypto crisis.

Previous developments also revealed the relationship between FTX and Moonstone Bank (also known as Farmington State Bank), a company led by Deltec chairman Jean Chaloppin. Moonstone received 11.5 million US dollars (Rp 179.4 billion) from Alameda and 50 million US dollars (Rp 781.3 billion) from a company linked to FTX, led by Ryan Salame. Moonstone closed this February after the action to stop from the Federal Reserve in August 2023.

Deltec denies making a mistake. Deltec's representative told Bloomberg that the bank and its chairman, Jean Chaloppin, were unaware of a mistake. Desiree Moore, a lawyer for Deltec, said:

"The new complaint relies heavily on statements that cannot be accounted for by individuals we understand are finalizing their lawsuits with the plaintiffs in exchange for the information provided."

Bloomberg did not identify the case in question, but said the allegations were filed in a federal court in Florida on Friday, February 16. The group's lawsuit against a law firm linked to FTX, Sullivan and Cromwell, was filed in Florida that day but does not appear to contain any relevant allegations.

The previous lawsuit filed in Florida in February 2023 named Deltec Bank as a defendant, but public registers do not contain updates to the case after June 2023. Therefore, it is unclear whether this is the case in question. Another lawsuit from the same plaintiff,ULd O'Keefe, began in Washington in July 2023. Deltec Bank also denied all allegations at that time.

However, the report revealed that the above case had nothing to do with the bankruptcy of FTX and Sam Bankman-Fried's criminal case as its founder.