FTX Bankruptcy: Bahamian Bank Indicted Over Secret SBF Credits

Amidst FTX bankruptcy which has been on for more than a year now, the former CEO of the beleaguered crypto exchange has been levied with another charge.

FTX Bankruptcy Takes New Turn

A new connection has been discovered between Sam Bankman-Fried and a Bahamian-based financial institution called Deltec. In a new filing submitted in a Florida federal court, FTX’s sister trading firm Alameda Research was accused of boosting the growth of USDT issuer Tether through a secret scheme. 

According to the lawsuit, the hedge fund used billions of dollars worth of secret short-term lines of credit from Deltec Bank & Trust Ltd to influence the growth of Tether.

Furthermore, the Bahamian-based bank was also accused of being an ally to Bankman-Fried in his fraud scheme where he misappropriated customers’ deposits. It was stated that Deltec helped FTX and Alameda Research by transferring the funds between accounts. Per the latest filing, the bank had every reason to be suspicious of the transfer but took no action against it.

Deltec tried to exonerate itself by claiming not to have any knowledge of the scheme. In Desiree Moore’s opinion, Deltec and its executives were not in the know until the matter was made public. Notably, Moore is a lawyer for Deltec at Venable LLP in Chicago. She went on to state that the latest accusations are from people who currently have lawsuits with plaintiffs and would be willing to provide information in exchange for the dissolution of their case.

Tether Caught in Between FTX and Deltec Probe

Tether is yet to release an official statement in respect to the case. These allegations were revealed as victims of the Bankman-Fried fraud scheme sought to reclaim their assets from Deltec and other organizations believed to be part of SBF’s enablers. With such a revelation, FTX bankruptcy proceedings are likely to get more complicated. 

There have previously been suspicions about Tether’s ‘rise to stardom’, especially with its total assets reaching $97 billion as against $91.6 billion in liabilities in December. But Tether kept refuting the claims, stating that there was no manipulation of its stablecoin. 

In the case of restructuring, FTX still plans on refunding creditors, although it is not yet certain if the latest revelation will cause a change of schedule. However, the reorganization plans in FTX bankruptcy might stall for a bit seeing that new information has come to light.