- Sam Bankman-Fried’s conviction exposes complex relationships involving Tether, Deltec Bank & Trust, and Alameda Research.
- Lawsuit alleges Alameda Research’s involvement in Tether’s growth and Deltec’s facilitation of fund misappropriation.
- Lawsuit documents reveal cooperation from Caroline Ellison and skepticism from Deltec’s lawyer.
The recent conviction of Sam Bankman-Fried, former crypto billionaire, on fraud charges has unveiled a complex web of relationships involving Bankman-Fried, Tether, and Deltec Bank & Trust Ltd. In a lawsuit filed against alleged enablers of Bankman-Fried’s scheme, new evidence has emerged, shedding light on the deeper connections between these entities. This article delves into the details of the lawsuit, exploring the alleged involvement of Bankman-Fried’s hedge fund, Alameda Research, and the role played by Deltec Bank & Trust.
The Lawsuit Allegations
The lawsuit alleges that Bankman-Fried’s hedge fund, Alameda Research, played a significant role in fueling the growth of Tether, a stablecoin, by utilizing a secret short-term line of credit from Deltec Bank & Trust worth billions of dollars. Deltec Bank & Trust is a financial institution based in the Bahamas. The lawsuit further claims that Deltec facilitated Bankman-Fried in misappropriating customer funds by transferring them between FTX, his exchange, and Alameda Research. The lawsuit argues that Deltec had sufficient grounds to be suspicious of these transfers.
Deltec’s Response
Desiree Moore, a lawyer representing Deltec at Venable LLP in Chicago, stated that the bank and its chairman, Jean Chalopin, were unaware of FTX’s misconduct until it became public. Moore also expressed skepticism regarding the new allegations, emphasizing that they rely heavily on unsubstantiated statements made by individuals who are settling their lawsuits in exchange for providing information.
Stuart Hoegner, a lawyer for Tether, has not yet responded to requests for comment at the time of writing.
The Lawsuit Documents and Caroline Ellison’s Cooperation
The recently filed documents in a Florida federal court were part of a case brought by lawyers representing victims of Bankman-Fried’s fraud. These victims seek to recover damages from alleged enablers, including Deltec. The lawyers state that Caroline Ellison, Bankman-Fried’s former colleague and ex-girlfriend, cooperated with them during settlement negotiations and handed over 7,000 pages of Telegram chats as evidence.
Understanding Tether and its Controversies
Tether, classified as a stablecoin, claims to be backed by real assets held in a bank. Despite its popularity, Tether has faced persistent skepticism regarding the legitimacy of its assets. The stablecoin’s total assets were valued at $97 billion with liabilities of $91.6 billion as of December. However, doubts remain regarding the veracity of these figures. Last month, Howard Lutnick, the chief of Cantor Fitzgerald LP, vouched for the authenticity of Tether’s assets, stating that his investment bank holds a significant portion of them.
Jean Chalopin: Inspector Gadget’s Creator and Deltec Bank & Trust Chairman
Jean Chalopin, renowned as the creator of Inspector Gadget, serves as the chairman of Deltec Bank & Trust. Chalopin resides in the Bahamas, where he is a neighbor of Giancarlo Devasini, Tether’s chief financial officer and de facto chief.
The Role of Alameda Research and Deltec
Bankman-Fried’s companies began opening accounts at Deltec Bank & Trust in 2018, primarily to gain easier access to Tether. According to the lawsuit, Alameda Research would transfer funds from its Deltec account to Tether’s account to create tokens. During the cryptocurrency boom of 2020 and 2021, Bankman-Fried’s fund allegedly helped generate billions of dollars in Tether tokens. The lawsuit suggests that Alameda Research received these tokens in advance and sold them at a profit before eventually paying for them.
The Secret Line of Credit and Profitable Trades
Starting in 2021, Deltec granted Alameda Research a three-day grace period to pay for the Tether tokens it purchased. This grace period effectively provided the fund with a short-term line of credit, which sometimes exceeded $2 billion, according to the lawsuit. Alameda Research took advantage of this arrangement by selling Tether coins at prices slightly above $1 and paying for them later. This facilitated profitable trades for the fund.
Text Messages and Revelations
Text messages provided as evidence in the lawsuit revealed a friendly relationship between Giancarlo Devasini and Alameda Research traders. The messages showcased their celebrations as Tether’s market cap grew from $10 billion to $20 billion and beyond. They also engaged in light-hearted banter regarding their contributions to the group’s success, expressing a sense of camaraderie.
Deltec’s Alleged Role and Assistance from FTX
The lawsuit alleges that Deltec Bank & Trust received deposits from FTX’s customers, and despite knowing that these funds belonged to customers, improperly sent them to Alameda Research. Deltec reportedly exempted Alameda Research from certain rules and, during the cryptocurrencyboom, facilitated the transfer of funds between FTX and Alameda Research. The lawsuit claims that Deltec had sufficient knowledge to be aware of the impropriety of these transfers.
Conclusion
The unfolding lawsuit against alleged enablers of Sam Bankman-Fried’s fraudulent scheme has shed light on the intricate connections between Bankman-Fried, Tether, and Deltec Bank & Trust. The allegations suggest a symbiotic relationship between Bankman-Fried’s hedge fund, Alameda Research, and Deltec, with Deltec providing a secret line of credit to facilitate the growth of Tether. The lawsuit also implicates Deltec in the misappropriation of customer funds and highlights the friendly relationship between Alameda Research and Tether’s CFO, Giancarlo Devasini. As the case proceeds, further investigations and legal proceedings will likely reveal more about the extent of these connections and the implications for the parties involved.
Disclaimer
The information provided in this article is for informational purposes only and should not be considered financial advice. The article does not offer sufficient information to make investment decisions, nor does it constitute an offer, recommendation, or solicitation to buy or sell any financial instrument. The content is opinion of the author and does not reflect any view or suggestion or any kind of advise from CryptoNewsBytes.com. The author declares he does not hold any of the above mentioned tokens or received any incentive from any company.
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