FTX secretly used Deltec Bank to create and sell Tether for profit, lawsuit alleges

FTX is facing allegations in a lawsuit claiming that the company secretly collaborated with Deltec Bank to create and sell Tether (USDT) for profit. According to the court case, which Bloomberg reported on February 17, FTX companies utilized a partnership with Deltec Bank to generate and profit from USDT. The lawsuit alleges that FTX’s sister firm, Alameda Research, transferred funds to Deltec accounts to fund the creation of billions of dollars in Tether. Alameda then sold these USDT tokens for a gain before depositing US dollars in Tether’s Deltec account. This arrangement, referred to as a short-term line of credit and a “three-day grace period,” was undisclosed and not offered to other customers by Deltec. The lawsuit further claims that Deltec facilitated the misappropriation of funds between FTX and Alameda, even though it had reason to be suspicious of the transfers. Allegedly, Deltec received FTX customer deposits and transferred the funds to Alameda, exempting Alameda from certain rules and prioritizing their withdrawals during a cryptocurrency market crash. Deltec denies any wrongdoing and maintains that its chairman, Jean Chalopin, had no knowledge of the alleged misconduct. Representatives of the bank state that the allegations rely on unsubstantiated statements from individuals who are settling their lawsuits in exchange for providing information. It is important to note that Tether has not been sued in the current case. These allegations are distinct from FTX’s ongoing bankruptcy case and the criminal case involving former FTX CEO Sam Bankman-Fried.