FTX and Alameda Allegedly Involved in Tether Scam: Lawsuit

A recent lawsuit reported by Bloomberg alleges that cryptocurrency trading platform FTX and its sister firm Alameda Research engaged in a scheme to profit from Tether (USDT) stablecoins. The lawsuit, filed in a Florida court, claims that FTX utilized Deltec Bank & Trust Ltd., based in the Bahamas, to secretly create and sell USDT stablecoins.

Accusations and Operations

According to the lawsuit, Caroline Ellison, former CEO of Alameda Research, detailed the operation, stating that Alameda created USDT on credit through Deltec's Line of Credit. Under the direction of then-FTX CEO Sam Bankman-Fried, the firm sold the USDT for profit without depositing U.S. dollars into Tether's Deltec account to fund the purchase.

Involvement of Deltec and Legal Action

The lawsuit also alleges that Deltec facilitated transfers between FTX and Alameda Research, aiding in the misappropriation of customer funds. However, Venable LLP, representing Deltec, denies any knowledge of wrongdoing by FTX.

Legal Ramifications and Investigation

Following FTX's bankruptcy, an investigation into its practices led to the conviction of founder Sam Bankman-Fried on seven counts of fraud and conspiracy. Bankman-Fried faces sentencing next month and is involved in various legal disputes, including a $1 billion lawsuit filed by FTX against him and other former executives.

Ongoing Legal Disputes

FTX has also initiated lawsuits against Binance, alleging breaches of contractual obligations and unfair competition. Additionally, Bankman-Fried and Alameda Research face lawsuits from the SEC and CFTC for fraudulent practices in commodity interest offerings.

Legal Proceedings and Industry Implications

Despite requests for a sentencing extension, the judge has denied the motion, citing potential delays due to a second trial scheduled for March 11. These legal proceedings have significant implications for the cryptocurrency industry as regulatory authorities seek to establish clear frameworks.

Conclusion：Lawsuit Alleges Tether Scheme

A lawsuit reported by Bloomberg accuses FTX and Alameda Research of orchestrating a scheme to profit from Tether stablecoins, alleging creation and sale of USDT without proper backing. Former CEO Caroline Ellison detailed the operation, implicating FTX's involvement under Sam Bankman-Fried's direction. Deltec Bank & Trust Ltd. is accused of facilitating transfers, although they deny wrongdoing. Bankman-Fried's conviction on fraud and conspiracy charges, ongoing legal disputes, including with Binance, and SEC and CFTC lawsuits against Alameda Research highlight industry-wide implications as regulatory scrutiny intensifies.