1 year ago
In a connection released August 17, 2023, Farmington State Bank, with an concern from Sam Bankman-Fried’s Alameda Research, consented to a cease and desist bid from the U.S. Federal Reserve. Alameda invested $11.5 cardinal into the bank’s coffers successful January 2022. Government seizure documents from January 2023 bespeak Bankman-Fried reportedly had $50 cardinal stashed successful the bank.
Fed Puts Brakes connected Alameda-Funded Farmington: Another Bank Bites the Dust
Farmington State Bank (Moonstone Bank) is complying with the U.S. cardinal bank’s cease and desist bid signed July 18, 2023. The Federal Reserve Board and Washington State Department of Financial Institutions (WDFI) issued the bid against Farmington State Bank of Farmington, Washington, and its holding company, FBH Corporation of Baltimore, Maryland.
The regulators determined Farmington violated commitments to regulators by engaging successful integer plus activities, specified arsenic stablecoin issuance, without indispensable approvals. Farmington allegedly agreed to physique infrastructure to facilitate a third-party’s stablecoin issuance successful speech for fees, began implementation and altered its concern exemplary without regulatory approval.
The bid mandates Farmington cease unauthorized activities, halt dividends, support assets and debar further actions without written consent. The slope besides agreed to merchantability each loans and deposits and terminate operations. Farmington’s August 17 press release confirmed adherence to the Federal Reserve and WDFI order. Alameda Research funded the slope successful January 2022.
Following the FTX and Alameda downfall, the slope acknowledged Alameda’s $11.5 cardinal investment, describing the quantitative trading steadfast arsenic a “passive investor.” In January 2023, national prosecutors revealed the seizure of $697 cardinal successful assets from Bankman-Fried. While the bulk ($526 million) consisted of 56 cardinal Robinhood shares, $50 cardinal was purportedly taken from Farmington, besides known arsenic Moonstone Bank.
Prosecutors noted astatine the clip that it was believed the confiscated funds were misallocated FTX lawsuit assets. Farmington is among galore banks forced to upwind down operations this year, curiously associated with FTX, Alameda, and Bankman-Fried successful assorted capacities.
What bash you deliberation astir the Fed shutting down Farmington State Bank? Share your thoughts and opinions astir this taxable successful the comments conception below.
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