FTX Accused of Profiteering from Tether Creation via Deltec Bank, Court Alleges

By: Eliza Bennet

An emerging lawsuit accuses crypto exchange FTX and its associates of exploiting Bahamas-based banking partner, Deltec Bank, to create and profit from the stablecoin Tether (USDT). This follows allegations that FTX created billions of dollars in USDT via lines of credit with Deltec, later selling the assets for substantial gain. Furthermore, the lawsuit points towards Deltec's questionable favoritism of Alameda Research, FTX's sister company, in bank transactions.

However, Deltec has denied any wrongdoing, asserting its innocence and lack of awareness of these incidences. An ongoing courtroom battle in Florida is expected to shed light on the issue. The matter in question has been separately raised in multiple lawsuits and is independent of the ongoing FTX bankruptcy case and criminal conviction of former FTX CEO, Sam Bankman-Fried.

Judges in the Southern District of New York have a history of awarding milder punishments than expected for white-collar offences. Given Bankman-Fried's restitution to victims, it's assumed his sentence may be lighter than anticipated.