The Federal Reserve issued an enforcement action against Farmington State Bank and its parent company FBH Corporation. The Washington-based bank used to do business as Moonstone Bank and had close ties with Alameda Research, FTX’s trading arm.
“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 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,” the central bank of the United States said.
In response to the central bank’s enforcement action, Farmington said it consented to the Fed’s order.
“All bank regulatory approvals for the assumption of deposits and the purchase of assets by Bank of Eastern Oregon of Farmington State Bank have been received. The transaction is expected to close by August 31, 2023,” the bank said in a statement.
The development follows a letter to the Federal Reserve by two senators last year asking for details about how Alameda was able to buy Moonstone Bank.
“While the banking system has so far been relatively unscathed by the latest crypto crash, FTX’s collapse shows that crypto may be more integrated into the banking system than regulators are aware,” the letters said.
