Federal Reserve Concludes Enforcement Action with FTX-Linked Farmington State Bank
The Federal Reserve has concluded its enforcement action against Farmington State Bank, located in Washington. Formerly known as Moonstone Bank and associated with FTX’s Alameda Research, the bank is now free from regulatory scrutiny.
The Federal Reserve Board has officially concluded its enforcement actions against Farmington State Bank and its parent company, FBH Corporation. This termination marks the end of a scrutinized period for the Washington-based bank, once intertwined with the now-defunct cryptocurrency exchange FTX.
Farmington State Bank, previously operating under the moniker Moonstone Bank, found itself at the center of regulatory oversight following its association with FTX’s trading arm, Alameda Research. The Federal Reserve’s decision to terminate the enforcement action comes after the bank completed its wind-down plan, effectively ceasing its banking operations.
The enforcement action, initiated in July 2023, aimed to ensure the orderly wind-down of Farmington’s operations, safeguarding the interests and deposits of its customers. The Federal Reserve in the recent announcement stated:
The Board’s enforcement action…ensured the bank’s operations would wind down in a manner that protected the bank’s depositors. Farmington has completed its wind down plan and no longer functions as a bank.
This move also coincides with the termination of two long-standing enforcement actions against BNP Paribas, showing the Federal Reserve’s willingness to close regulatory chapters with institutions that have complied with mandated corrective measures.
The link between Farmington Bank and the volatile world of cryptocurrency trading came under scrutiny after it received approximately $11.5 million from Alameda Research through FBH Corporation in March 2022. The collapse of FTX in November 2022 prompted a re-evaluation of Farmington’s engagement in the crypto space, with the bank expressing its intent to revert to its role as a community bank.