FTX Investing in a Small Washington Bank, But Why? ( News Washington )

Following the signing of the bankruptcy capital FTX 11, crypto mogul Sam Bankman-Fried unsuccessfully went around town trying to explain his side and restore his reputation.

But documents never lie. During the bankruptcy proceedings, one of the assets was revealed by FTX, bringing the curiosity of a small bank in the state of Washington.

How much? Farmington State Bank has only one location and only three staff this year. He didn’t even have online credit or a credit card.

In March, sister FTX hedge fund Alameda Research invested $11.5 million in Farmington State Bank parent company FBH. According to the Federal Deposit Insurance Corporation, the bank’s net worth was $5.7 million; it was the 26th-smallest bank in the country out of 4,800 at the time of the investment.

But it was not the only particular problem that raised some questions. Back in 2020, Farmington State Bank was acquired by FBH whose president was Jean Chalopin. He is also the chairman of Deltec Bank, which, like FTX, is based in the Bahamas—but its best-known client is the $65-billion crypto firm Tether.

It is unclear how Bahamas-based FTX was allowed to acquire a stake in the US-licensed bank, which would require approval from federal regulators. Banking experts say it is hard for authorities to believe that FTX was knowingly allowed to take control of a US bank.

Moreover, a small bank in Washington could apply for membership in the Federal Reserve System. It was approved in June 2021 by the San Francisco Fed whose directors include Chalopin and Gemini Chief Compliance/Operating Officer Noah Perlman.

The Twins Earn program was recently revealed to be in partnership with the lending arm of Genesis. They announced a freeze on redemptions and withdrawals on their interest products after FTX suffered a liquidity crunch that caused the firm to collapse.

Farmington’s deposits had remained at about $10 million a decade before the stable’s acquisition. But bank deposits increased by about 600% to $84 million in the third quarter of this year, presumably after the Alameda investment.

According to FDIC records, nearly all of the increase, $71 million, came from four new accounts.

It is unclear what Farmington FTX had in mind. The bank today is known online as Moonstone Bank and its website makes no mention of Bitcoin or any other digital currency, except to claim that it is “supporting the development of the next generation of finance”.

The Farmington siege is curiously one of the many traps that have been uncovered in FTX’s activity. The crypto exchange, Bankman-Fried’s parents, and the firm’s officials bought at least 19 homes in the Bahamas valued at nearly $121 million in the last year, according to public documents.

In her letter to staff after she signed the bankruptcy filings, Bankman-Fried stated that “the study has the potential to cost billions of dollars in approximately eight minutes” minutes after inking the final process.

“Perhaps there is still a chance to save the company. I believe there are billions of dollars in real interest from new investors that could go to making whole customers. But I can’t promise you what will happen. Because it’s not my decision, the founder of FTX in the letter.

The information for this summary was found by The New York Times and cited sources. The author has no guarantees or affiliations related to this organization. A recommendation not to buy or sell. Always do additional research and consult a professional before purchasing a security. The author will not disagree with these.


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