Summary
The Federal Reserve has ended an enforcement action with Farmington State Bank, which had connections to collapsed crypto exchange FTX. Farmington changed its business plan without informing regulators, and the enforcement action ensured the bank’s wind down in a way that protected depositors. Farmington, previously known as Moonstone Bank, was tied to FTX’s trading arm, Alameda Research. The Federal Reserve also terminated two enforcement actions with BNP Paribas in France. Senators Elizabeth Warren and Tina Smith had previously inquired about Farmington’s ties to FTX. This development highlights the potential integration of crypto into the banking system.
Key Points
1. The Federal Reserve has terminated an enforcement action with Farmington State Bank, which had ties to collapsed crypto exchange FTX.
2. The central bank said in August that Farmington State Bank and its holding company FBH Corporation changed its business plan without notifying supervisors.
3. Farmington has completed its wind down plan and no longer functions as a bank, according to a statement from the Federal Reserve.
The Federal Reserve also announced the termination of two enforcement actions with BNP Paribas in Paris, France on Tuesday.
FTX ties:
Farmington, formerly known as Moonstone Bank, had direct ties to FTX’s trading arm Alameda Research.
When issued the central bank’s enforcement action last year, Farmington consented to the order.
Sen. Elizabeth Warren and Tina Smith had probed into the bank’s ties to FTX and wrote to the Federal Reserve in 2022 seeking details about Alameda’s ability to purchase Moonstone Bank.
The letters highlighted that while the banking system has been relatively unaffected by the recent crypto crash, FTX’s collapse demonstrates the integration of crypto into the banking system.