Two Baltimore companies, FBH Corporation and cybersecurity firm ZeroFox, are financially linked to bankrupt crypto exchange FTX, according to a recent court filing in the U.S. District Court of Delaware.
In November, the exchange valued at $32 billion plunged into bankruptcy, rocking the cryptocurrency industry and spurring government investigations and lawsuits. The exchange’s founder, Sam Bankman-Fried, was arrested in December on eight criminal charges and faces up to 115 years in prison.
In court filings, the SEC alleges “Bankman-Fried was orchestrating a massive, years-long fraud, diverting billions of dollars of the trading platform’s customer funds for his own personal benefit and to help grow his crypto empire.”
Here’s what we know:
FBH Corp. and ZeroFox Holdings Inc. are listed among thousands in FTX’s “creditor matrix,” which was compiled from FTX’s accountings in an attempt to identify those the bankrupt firm owed money. Some of the listed entities may not be creditors of FTX, according to a separate filing, but instead former business associates..
The filing doesn’t specify why a company is listed or, if it is a creditor, how much money is owed. The list includes numerous state government agencies, including the Office of the Comptroller in Maryland.
How is FBH Corp. related to FTX?
FBH’s president and secretary are Jean Chalopin and Robin Trehan, who are also executives at Bahama-based Deltec Bank. (FTX founder Bankman-Fried was extradited from the Bahamas.)
Deltec is becoming an increasingly central figure in the FTX financial scandal, according to Forbes. So has Chalopin, who is a well-known French businessman and supporter of cryptocurrency. For people not involved in crypto, he might be best known for his work in the 1980s and 1990s producing animated TV series such as “Inspector Gadget,” “The Real Ghostbusters” and “Dennis the Menace.” Forbes reported that Chalopin secretly facilitated a loan worth tens of millions of dollars from FTX to his bank, Deltec.
Under an earlier name, FBH in 2020 acquired Farmington State Bank, a small Washington state financial institution with, until recently, only one branch and three employees.
In March 2022, the bank filed a trademark for Moonstone Bank and changed its name. Days later, Bankman-Fried’s trading firm Alameda Research invested $11.5 million in FBH and Moonstone, which was billed in a press release as “a robust financial platform to empower” the blockchain, cryptocurrency and cannabis industries.
Prior to its rebranding, Farmington didn’t have online banking or credit card services.
Court filings show that prosecutors seized almost $50 million worth of alleged FTX funds Bankman-Fried had deposited in Moonstone.
A Moonstone news release distributed after FTX’s collapse said the investment Moonstone received from Alameda Research was at a time when the firm had “a pristine reputation” and “was a darling of the financial markets.” According to the release, Alameda Research is a passive investor without board membership or involvement with management.
FBH Corp. and Moonstone declined to comment for this story.
A Deltec news release on the company’s exposure to FTX said that the crypto exchange did not provide services or hold assets for the bank, and that Deltec has “no credit or asset exposure” to FTX.
Wait, what is FBH’s connection to Baltimore?
On the FTX creditors matrix, FBH’s address is listed in Baltimore, specifically at the Baker Donelson law firm offices on Light Street. State records show Baker Donelson attorney Frank C. Bonaventure Jr., who declined to comment for this article, helped incorporate FBH at the firm’s address in 2019.
Trehan is listed as the sole incorporator in state records for what was then known as GUVJEC Investment Corporation. In September 2020, FBH was incorporated in Washington state, with Chalopin listed as the company’s governor, according to records. Two months later, the business’s name in Maryland was changed to FBH Corporation and Chalopin was added to the company as its president, according to state records.
However, beyond the incorporation documents, FBH does not appear to have operations in Baltimore.
How is ZeroFox involved?
South Baltimore-based cybersecurity firm ZeroFox was also listed in FTX’s credit matrix. In a statement to The Baltimore Banner, a ZeroFox spokesperson said that FTX is a customer of ZeroFox’s for external cybersecurity risks — not a creditor to the exchange.
ZeroFox rose to prominence locally after The Baltimore Sun uncovered that the cybersecurity company had issued a report to city officials identifying well-known activists as “threats actors” during the 2015 Freddie Gray protests.
The cybersecurity firm also works with federal law enforcement. In December 2020, the firm signed a multimillion dollar social media intelligence contract with the FBI.
Banner reporter Justin Fenton contributed to this article.
Source: Credit Link The BaltimoreBanner