- In a major development, Deltec Bank faces legal action from affected FTX customers over allegations of aiding fraudulent activities by FTX and Alameda Research.
- Bloomberg, citing court documents, reveals that Deltec Bank had provided Alameda Research with a substantial short-term credit line of up to $2 billion.
- Given their close partnership, the bank’s credit line was utilized by Alameda Research to issue and trade USDT stablecoins.
The lawsuit filed against Deltec Bank alleges that the collaboration between Alameda Research and the bank allowed the former to engage in market manipulation, causing the value of USDT to exceed $1, thus enabling profit-seeking through trading.
The plaintiffs argue that Alameda Research borrowed funds from Deltec Bank, issued USDT, sold them at a premium, and only then deposited the proceeds into Tether accounts.
Evidence suggests that the credit line was unofficial in nature, as Deltec Bank advised Alameda Research to keep it confidential.
Furthermore, the lawsuit alleges that Deltec Bank knowingly directed FTX deposits to Alameda Research, fully aware that these were funds belonging to FTX customers.
It is worth noting that Deltec Bank has faced scrutiny from US authorities in the past, with accusations of money laundering and the seizure of $58 million in assets by the US Secret Service.
The Chairman of Deltec Bank, Jean Jacques Pierre Chalopin, is also the owner of FBH Corporation and Farmington State Bank. The Fed recently issued an enforcement action against Deltec Bank, citing its links to cryptocurrency companies.