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

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

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

Farmington’s announcement did not mention the name of the struggling FTX crypto exchange, but said the strategic pivot “reflects the impact of recent events in the crypto asset industry and the evolution of the resulting regulatory environment”.

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 a French banker (and Co-creator of “Inspector Gadget”) Jean Chalopin, bought Farmington State Bank in 2020. Chalopin is also chairman of Bahamas-based Deltec Bank, which itself secured 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 to the bank’s local 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 its liquid balance sheet and customer deposits have 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 at bankrupt crypto firm Voyager Digital, said this month it would exit the industry. Crypto-heavy Silvergate Capital announced this month that it would cut 40% of its staff after the collapse of FTX sparked a run that forced the bank to sell assets at a loss to cover about $8.1 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.