Farmington State Bank, connected to FTX, withdraws from crypto and cannabis

[ad_1]

Farmington State Bank is abandoning plans to develop crypto and cannabis-related banking services, the company announced Thursday.

The bank will also stop using the Moonstone Bank brand it developed for such innovation-driven activities, he said.

Farmingtons’ announcement did not mention the name of the beleaguered FTX crypto exchange, but said the strategic pivot reflects the impact of recent events in the crypto asset industry and changing environment. resulting regulations.

Moonstone secured an $11.5 million investment last January from Alameda Research, a trading company launched by FTX founder Sam Bankman-Fried, according to Forbes.

FBH, a company owned by French banker (and Inspector Gadget co-creator) Jean Chalopin, bought Farmington State Bank in 2020. Chalopin is also chairman of Bahamas-based Deltec Bank, which itself got a $50 million loan from FTX, Forbes reported. earlier.

Farmington, a 135-year-old bank headquartered in a Washington state town with about 150 residents, began notifying its crypto industry customers last week that it plans to shut down their accounts, the publication reported, adding that the bank had asked customers to cease transactions and transfer. their assets to another financial institution.

The return to its role as a community bank will be seamless for local bank customers in the Farmington community, with no change or disruption to services, Farmington said in Thursday’s announcement. The bank has always remained committed to safe and sound practices, maintained liquidity on its balance sheet, and customer deposits remained secure and fully accessible.

The bank emerged from obscurity in November, when The New York Times featured the bank. It has since become the focus of lawmakers and regulators warning of contagion from the FTX collapse.

Farmington is not the first bank to pull out of the crypto space. Metropolitan Commercial Bank, once a partner in bankrupt crypto firm Voyager Digital, said this month it would exit the business. Crypto-heavy Silvergate Capital announced this month that it would cut 40% of its staff after the FTX meltdown sparked a run that forced the bank to sell assets at a loss to cover around $8,000,000. $1 billion in withdrawals.

Silvergate saw its crypto-related deposits drop 68% in the fourth quarter. Silvergate and Signature Bank, another FTX financier, have secured billions of dollars in advances through the Home Loan Bank System, a consortium that provides liquidity to financial institutions, Forbes reported.

[ad_2]