Deltec Bank implicated in alleged Tether manipulation scheme

In a recent turn of events following the conviction of Sam Bankman-Fried (SBF) on fraud charges, a lawsuit has been filed unveiling deeper connections between SBF, Deltec Bank, and the USDT stablecoin issuer Tether. 

The lawsuit, brought forth against purported enablers of SBF’s scheme, sheds light on a complex relationship that facilitated the manipulation of Tether.

Deltec Bank’s secret line of credit to Alameda Research

The lawsuit alleges that SBF’s hedge fund, Alameda Research, received a clandestine short-term line of credit worth billions of dollars from Deltec Bank, based in the Bahamas, to bolster the expansion of Tether. 

Specifically, Deltec purportedly granted Alameda a three-day grace period to settle payments for USDT tokens, enabling profitable trades by allowing Alameda to sell USDT before funding the purchase.

Accusations against Deltec Bank

Deltec Bank is accused of aiding Bankman-Fried in misappropriating customer funds by facilitating transfers between FTX and Alameda. Despite purported suspicious transactions, Deltec allegedly failed to take appropriate action, according to the lawsuit. 

However, Desiree Moore, legal counsel for Deltec, refuted these claims, asserting that the bank was unaware of FTX’s misconduct until it was disclosed publicly.

The lawsuit documents were submitted to a Florida federal court as part of a case initiated by attorneys representing victims of Bankman-Fried’s fraud. These victims seek compensation from alleged accomplices, including Deltec. 

The revelation adds another layer to the intricate web of allegations surrounding Bankman-Fried’s enterprises, particularly in light of FTX’s collapse in November 2022, leading to his conviction on multiple counts of fraud and conspiracy.

Implications and sentencing

As the sentencing for Sam Bankman-Fried looms, the lawsuit underscores the gravity of the situation, implicating a prominent financial institution like Deltec Bank in the alleged wrongdoing. 

The outcome of the legal proceedings will likely have far-reaching implications for all parties involved, potentially reshaping the regulatory landscape surrounding cryptocurrencies and financial institutions.