The Federal Reserve ended a punishment against Farmington State Bank on February 6. They said the bank affiliated with FTX has finished shutting down and is not a bank anymore.
“The Board took action in July 2023 to make sure the bank closed in a way that kept its depositors safe,” the central bank said.
Farmington State Bank is being told to do something by a government agency
The Fed said in August 2023 that Farmington State Bank and its parent company, FBH Corporation, changed their business plan without telling regulators.
The central bank said it’s done with two agreements it had with BNP Paribas in Paris, France.
“Both punishments started in June 2014 and made BNP Paribas put a plan in place to follow U. S rules all around the world. ” The central bank said that BNP Paribas broke the law about sanctions.
Farmington was connected to a crypto exchange called FTX’s trading arm, Alameda Research. However, the Fed enforcement action and the termination of its action did not mention FTX or Alameda explicitly.
In March 2022, Farmington (which used to be called Moonstone Bank) got about $11. 5 million from Alameda Research, a sister company of FTX, through FBH Corporation.
After FTX failed in November 2022, Farmington first said it would stop using cryptocurrency and go back to being a regular community bank. When the central bank told Farmington to do something, Farmington agreed to follow the rules.
In August, Farmington said that Bank of Eastern Oregon has been given permission to take over deposits and buy assets from Farmington State Bank by all the bank regulators.
Farmington Bank is being looked at closely by authorities
Senator Elizabeth Warren and Tina Smith looked into the bank’s ties to FTX and asked the Fed in 2022 for details about how Alameda was able to buy Moonstone Bank.
In the letters, they were worried and said, “The banking system has not been affected much by the recent crypto crash, but FTX’s collapse shows that crypto might be more connected to the banking system than regulators realize. “