The Fed has filed a lawsuit against Farmington State Bank for its ties to the bankrupt FTX.
While FTX’s case is still not concluded, a sanction came from the Fed to the bank associated with the bankrupt stock market. The Fed has initiated enforcement action against Farmington State Bank.
Execution from the Fed to the bank with which FTX is associated
The US Federal Reserve (Fed) has taken enforcement action against Farmington State Bank, which is affiliated with the FTX crypto exchange. The bank’s holding company, FBH Corp. was the target of this action.
According to the Fed’s statement, this action aims to liquidate the bank’s operations with the aim of protecting the bank’s customers and the Deposit Insurance Fund. It also prohibits Farmington and FBH from distributing dividends or capital, distributing cash assets, and engaging in certain activities without auditor approval.
Farmington State Bank previously operated as Moonstone Bank. The bank came under scrutiny after the collapse of Samuel Bankman-Fried’s FTX exchange, founded by the hedge fund Alameda Research, after the fund had invested $11.5 million in the lender. The bank announced in January that it would cancel its plans to offer banking services to digital asset and cannabis companies.
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