The US Federal Reserve took enforcement action against Farmington State Bank, a lender with ties to failed crypto firm FTX.
(Bloomberg) — The US Federal Reserve took enforcement action against Farmington State Bank, a lender with ties to failed crypto firm FTX.
The bank’s holding company FBH Corp. was also subject to the action. “The Board’s action ensures the bank’s operations will wind down in a manner that protects the bank’s depositors and the Deposit Insurance Fund,” the Fed said in a statement. “The action also prohibits Farmington and FBH from making dividends or capital distributions, dissipating cash assets, and engaging in certain activities without approval from its supervisors.”
Farmington, which previously did business as Moonstone Bank, drew scrutiny following the collapse of FTX after it came to light that Alameda Research, the hedge fund also co-founded by Samuel Bankman-Fried, invested $11.5 million in the lender to take a non-controlling stake.
The bank announced in January that it would step away from plans to offer banking services for digital-asset and cannabis companies.
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