Deltec Bank and Trust Ltd, a Bahamian financial institution, is facing allegations that it covertly extended a $2 billion line of credit to Alameda Research, the crypto hedge fund founded by Sam Bankman-Fried. The accusation comes from a lawsuit filed by individuals who claim to be victims of SBF's fraudulent schemes.
Misappropriation of Customer Funds and the Credit Line
According to the lawsuit reported by Bloomberg, Deltec granted Alameda a three-day grace period for settling stablecoin purchases, a privilege not offered to other customers. This allowed Alameda to profit from price differences between USDT and the US dollar. Caroline Ellison, former CEO of Alameda Research, stated in a declaration on February 16: “Alameda could create USDT on credit through the unofficial Deltec Line of Credit and sell that USDT for a gain before having to fund the purchase by depositing U.S. dollars in Tether’s Deltec account.” The lawsuit also accuses Deltec of aiding Bankman-Fried in misappropriating customer funds, exempting Alameda from certain rules, and prioritizing its withdrawal requests.
Deltec's $50 Million Loan from FTX Affiliate
In a surprising twist, the lawsuit reveals that Deltec itself received a $50 million loan from an entity controlled by Ryan Salame, a former FTX executive. Text messages cited in the filing also suggest a close relationship between Tether’s CFO Giancarlo Devasini and Alameda traders, raising concerns about potential collusion.
Lawyers representing Deltec from Venable LLP in Chicago have denied the allegations, claiming that the bank and its chairman Jean Chalopin were unaware of FTX's misconduct before it became public. Stuart Hoegner, Tether's legal representative, did not immediately respond to Bloomberg's request for comment.
The case is ongoing, and if proven, Deltec could face severe legal and reputational damage. The affair underscores the blurred lines of compliance between banks and crypto exchanges in the post-FTX era.