According to a report on February 17th, a lawsuit alleges that FTX orchestrated a confidential deal with Deltec Bank. Caroline Ellison, previously the CEO of Alameda Research, disclosed that Alameda had the ability to generate USDT through credit and subsequently sell it for profit via an unofficial credit line with Deltec, deferring immediate payment. This setup enabled Alameda to mint billions in USDT during 2020 and 2021, selling the cryptocurrency at a profit before settling debts. This approach provided Alameda with considerable financial leverage, facilitating transactions with funds not yet paid for, described as a short-term credit facility. A Substantial Scam The lawsuit contends that Deltec facilitated the movement of funds between FTX and Alameda, including transferring FTX customer deposits to Alameda, contrary to standard protocols. It further alleges that Deltec favored the transactions of Alameda, particularly during cryptocurrency market downturns. Connections between Deltec, FTX, and Moonstone Bank are also highlighted, with Moonstone Bank receiving substantial sums by Alameda and an FTX affiliate. Following scrutiny by the Federal Reserve in August 2023, Moonstone Bank ceased operations this February. Damage Control Deltec representatives, including lawyer Desiree Moore, asserted that neither the bank nor its Chairman were aware of any wrongdoing. They argued that the accusations rely on unverified assertions by individuals seeking to resolve legal disputes. These claims compound the legal hurdles facing FTX, which are largely distinct compared to its bankruptcy proceedings and the criminal case involving its former CEO, Sam Bankman-Fried. The intricate network of financial dealings raises concerns about regulatory oversight within the cryptocurrency sector.
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