In late 2021, Deltec was well on its way to becoming one of the world’s most consequential crypto banks — but it needed money.
An obscure Bahamian bank born from private wealth management, it had found a profitable, yet risky, new role as the banker of choice for crypto giants.
After signing on Tether, a wildly popular “asset-backed” stablecoin that traditional financiers had dropped, Deltec amassed a roster of white-hot clients, among them the $32 billion crypto exchange FTX, then one of the largest.
FTX: The Rise and Fall
Before FTX collapsed in November, it appeared flush with cash, spending lavishly across the Bahamas, while its founder Sam Bankman-Fried was lauded as a “future trillionaire.” Amid the dollar signs surrounding his new client, Deltec chairman Jean Chalopin saw an answer to his funding woes.
In October 2021, he secured a $50 million loan from an entity connected to FTX through one of its executives; the entity’s ties to FTX and its loan to Deltec have not been previously reported.
Deltec’s Ties to FTX
Now, as investigators sort through the rubble of the biggest financial catastrophe in recent memory, Deltec is emerging as a central figure in the scrum of lawyers, banks and unwitting associates FTX pulled into its orbit.
And its fate, once hitched to the exchange’s heady ascent, is now caught in its cataclysmic downward spiral. Further complicating matters are a handful of transactions between FTX, its sister trading arm Alameda Research and Chalopin’s companies that make their interests hard to disentangle.
Moonstone Bank Deal
Besides the loan to Deltec in late 2021, Alameda invested $11.5 million into Moonstone Bank, a tiny Washington state bank owned by Chalopin through a holding company.
In a December court filing, Bahamas liquidators revealed that Moonstone held nearly $50 million in FTX funds across two accounts, appearing to make the exchange its largest customer, and Alameda its largest investor. After they announced the deal, Chalopin boasted that it “signifies the recognition, by one of the world’s most innovative financial leaders, of the value of what we are aiming to achieve.”
Ties to FTX leaders
The deal also illustrated Chalopin’s ties to FTX leaders. Dan Friedberg, a top FTX lawyer, was approached by Chalopin about the Moonstone deal because the two had forged a close personal bond.
During business trips to the Bahamas, Friedberg dined with Chalopin, and FTX and Deltec employees recalled to Forbes that both men spoke highly of one another. “Starting in or around August 2021, Jean began discussions with Dan Friedberg about a potential investment,” Chalopin’s spokesperson Eric Hersey told Forbes.
Investigations and Scrutiny
Deltec ultimately became a proud ally of FTX in private and in public. In April, the bank sponsored FTX’s extravagant Crypto Bahamas conference, which featured Chalopin as a speaker alongside Bill Clinton, Tony Blair and other notable figures. “Deltec has been a long-time friend of FTX, and it is our pleasure to support them,”
After FTX filed for bankruptcy in November, it was revealed in filings that Alameda had issued large loans to multiple executives, including a $1 billion loan to Bankman-Fried.
Additionally, $55 million was loaned to an entity controlled by the Bahamas CEO of the company, Salame, which sources familiar with the matter stated was the same entity used to send the loan to Deltec International Group. Salame’s lawyer did not provide a response to questions about the transaction.
The following month, Salame discussed repayment terms for the $50 million loan during a meeting with Deltec executives, including Chalopin. Chalopin, through a spokesperson, stated that he is still awaiting a response from Salame and FTX’s counsel on how to repay the loan.