This loan is headed by Deltec Bank and Moonstone Bank, inspector gadget — Someone who has a lucrative relationship with FTX.
MeIn late 2021, Deltech was becoming one of the most important cryptocurrency banks in the world, but it needed funding. An obscure Bahamian bank born out of private wealth management has found a lucrative but dangerous new role as the bank of choice for the crypto giants. After signing Tether, a very popular “asset-backed” stablecoin dropped by traditional financiers, Deltech has announced a $32 billion crypto exchange FTX, one of the largest at the time. We have assembled a heated roster of clients, including
FTX seemed to be spending money lavishly across the Bahamas before going bankrupt in November, with founder Sam Bankman-Fried being hailed as a “future billionaire.” Among the dollar signs surrounding the new client, Deltec chairman Jean Chalopin saw an answer to his funding problem. In October 2021, he secured his $50 million loan from a company affiliated with his FTX through one of its executives. The entity’s relationship with FTX and its loans to Deltec have not been previously reported.
Now, as investigators sort through the rubble of the biggest financial catastrophe in recent memory, Deltec has emerged as a central figure in FTX’s scrum, its orbiting lawyers, banks and unwitting companions. doing. And his fortune, once tied to the exchange’s dizzying rise, is now caught in its cataclysmic downward spiral. Further complicating matters are several deals between FTX, its sister trading arm Alameda Research, and Chalopin’s company, making it difficult to disentangle the interests of these companies. increase.
In addition to its loan to Deltec in late 2021, Alameda invested $11.5 million in Moonstone Bank, a small Washington state bank owned by Chalopin through a holding company. In a December court filing, the Bahamas liquidator revealed that Moonstone held about $50 million in his FTX funds in two of his accounts. After the deal was announced, Chalopin boasted, “It means one of the world’s most innovative financial leaders has recognized the value of what we’re trying to achieve.”
The deal also demonstrates the connection between Chalopin and FTX leaders. Top FTX attorney Dan Friedberg was contacted by Chalopin about the Moonstone deal as the two had developed a close personal bond.While on a business trip to the Bahamas, Friedberg dined with Chalopin and FTX and Deltec employees forbes that both men held each other in high esteem. “From around August 2021, Gene began discussions with Dan Friedberg about a potential investment,” said Shalopin spokesperson Eric Hershey. forbes.
The Moonstone deal is one of several deals under scrutiny by US lawmakers. FTX Chief Regulatory Officer Friedberg met with prosecutors earlier this month as authorities probed FTX and its executives for evidence of securities fraud. It turns out that he shared details about the alleged misuse and how the money was used. Spent by Alameda. (Bankman-Fried has pleaded not guilty to eight criminal charges against him.) Reuters was not informed that Friedberg was under criminal investigation and emailed the FBI agent, “I am I want to cooperate in every way,” he said.
Shalopin refused to speak forbes When asked for comment, he instead, through his publicist, provided answers to a detailed list of questions, including confirming the $50 million loan and its relationship with FTX.
Friedberg declined to comment.
“There are more questions than answers.
Deltec eventually became a proud ally of FTX, both privately and publicly. In April, Banks sponsored his FTX luxury crypto his Bahamas conference, which featured Shalopin as a speaker alongside Bill Clinton, Tony Blair, and other celebrities. “Deltec is a longtime friend of FTX and we are happy to support them,” Chalopin said at the time.
Nearly a million creditors have sought the return of assets in recent weeks, attracting the attention of investigators hoping to track the exchange’s money flow as non-traditional banks. Last month, the SEC filed a complaint filed against Alameda CEO Caroline Ellison and FTX co-founder Gary Wang, alleging that FTX was distributing customer funds through another cryptocurrency bank, Silvergate Capital. Accused of draining to Alameda. The SEC did not respond to questions about whether it was investigating Moonstone or Deltec.
FTX’s new CEO John J. Ray, who testified before Congress last month, has overseen the company’s bankruptcy and confirmed plans to reconsider the exchange’s relationship with banking partners, including Moonstone. . “We are from FTX Group [Moonstone Bank] And we see that bank’s connection to the Bahamas,” he told lawmakers. “There are more questions than answers.
Lawyers for FTX did not respond to a request for comment.
T.Turning the Bahamas into a cryptocurrency financial haven was like clearing out a jungle where “you have to cut branches with a machete,” Shalopin said in a podcast in June about Deltec’s role. It wouldn’t do us any good in the Bahamas without us in the first place. ”
Chalopin, the bespectacled, red-haired Frenchman, was one of the minds behind it. inspector gadget, a popular comic about a playful but lovable cyborg detective.Shalopin’s Own Story Was Bigger Than His Life: After Co-Creation inspector gadget After overseeing a diverse resume in the 1980s that included a failed Parisian theme park, a pharmaceutical company, and a Beijing restaurant chain, he turned to a banking career. In 2010, he took over as chairman of Deltec in the Bahamas.
In 2018, Shalopin is looking at ways to diversify its bank’s customer base, expanding Deltek’s services to both individual and corporate cryptocurrency customers. That year, he made Deltech famous by securing Tether as a customer, which was looking for a banking partner all over the world. Deltech, which had only managed a few billion dollars, announced in November 2018 that he had $1.8 billion in stake for stablecoins.
Realizing that cryptocurrency presented a huge opportunity for his backwater bank, Chalopin and his team supported the Bahamian government’s crypto ambitions and led regulators to turn the country into a sandbox for digital asset startups. I helped draft a bill to change it. “He was one of the first regulators to put something together,” he said. forbes In an undisclosed interview in October. “And that’s what attracted FTX.”
With new laws introduced in 2020, a friendly government and local crypto banks willing to do business, the Bahamas has been an attractive new home for FTX and its sister company Alameda. FTX will later open its Nassau headquarters in September 2021.
D.Eltec’s new proximity to such a large client presents a lucrative opportunity. At the time, Chalopin was overseeing a cryptocurrency push by Deltech’s parent company, which began offering services such as reinsurance, token listings and other financial solutions, and was planning a potential U.S. public offering. rice field. But the effort ahead of the IPO needs funding, and Deltec has been trying to raise debt capital in New York without success, according to two people familiar with the matter.
Chalopin turned to FTX as another funding route. In October 2021, Deltek’s parent company, Cayman Islands-based Deltek International Group, announced that it had received $50 million of his $50 million investment from Norton Hall, a company controlled by Ryan Salaam, his CEO of FTX’s Bahamas business. I got a loan.by Shalopin forbes(Norton Hall was not on the list of FTX debtors.)
It was one of several agreements between the two companies overseen by Chalopin. During private conversations and meetings at FTX headquarters, Chalopin pitched FTX and Alameda staff, including Friedberg, about investing in Moonstone, a community bank he owned in Washington State. Deltec.
Before Chalopin acquired Moonstone in 2020, the bank primarily issued loans to farmers and was known as Farmington State Bank. With a net worth of $5.7 million, three employees and his one branch, he is one of the smallest companies in the country. His $11.5 million investment in Alameda, which occurred in January 2022 and was announced by his Chalopin in March, was more than double what his bank was worth at the time. “We threw [Alameda Research] Janvier Chalopin, Moonstone Chief Digital Officer and Jean’s son, said: Said On the November Twitter space. “This is a huge gap for U.S. banking to the digital asset business, and this is something we believe we can solve.”
FTX eventually opened two accounts with Moonstone containing nearly $50 million, according to Bahamas liquidators. (Moonstone was not on the list of FTX and Alameda accounts that surfaced as part of bankruptcy proceedings in November. In December, Senator Elizabeth Warren asked the Federal Reserve to move to Alameda’s bank.) requested information about their investments.) Moonstone did not respond. forbesInquiries regarding the status of these funds.When contacted separately, Jeanvier Chalopin did not respond to a detailed list of questions after refusing to speak. forbes in December.
The public culmination of Deltec’s partnership with FTX culminated in the Crypto Bahamas Summit co-hosted by FTX at the Baha Mar Resort. Chalopin and several people connected to him through Deltec and its network were featured in speeches and panels. Among them was Ryan Pinder, the Bahamas Attorney General and former chief legal officer of his Deltec. (Pinder is now leading the government’s FTX investigation.)
Speaking about banks embracing cryptocurrencies at the FTX-led conference, Zhang said in a fireside chat that there are probably 20 people on the ground at today’s conference. “We are here because we have embraced that vision of the future.”
Ah A week after FTX filed for bankruptcy in November, the company disclosed in filings that Alameda had made huge loans to several executives, including $1 billion transferred to Bankman-Fried. bottom. In another case, $55 million was transferred to an entity controlled by his CEO, Salame, in the Bahamas of the company, people familiar with the matter said. forbes It was the same entity used to transfer the loan to Deltec International Group.Salameh’s attorney, Jason Linder, did not answer questions. forbes about dealings.
The following month, Salameh met with Deltec executives, including Chalopin, to discuss repayment terms for the $50 million loan. In a statement to forbesthrough his spokesperson, Shalopin said he is still waiting for a response from Salaam and FTX’s lawyers on exactly how to do that.
Nina Bambysheva and Steven Ehrlich contributed reporting.