Farmington State Bank Completes Wind-Down Plan
The Federal Reserve has announced that Farmington State Bank, affiliated with FTX, has successfully completed its wind-down plan and is no longer operating as a bank. The central bank’s enforcement action, which began in July 2023, ensured that the bank’s depositors were protected throughout the wind-down process.
Previous Enforcement Action
In August 2023, the Fed revealed that Farmington State Bank and its holding company, FBH Corporation, had made changes to their business plan without informing regulatory supervisors. As a result, the enforcement action was imposed to address this issue.
Termination of Enforcement Actions with BNP Paribas
The Federal Reserve has also terminated two enforcement actions with BNP Paribas in Paris. These actions were initiated in June 2014 and required BNP Paribas to establish a program to ensure compliance with U.S. sanctions laws.
FTX Connection
Farmington State Bank had direct ties to FTX’s trading arm, Alameda Research. However, neither the enforcement action nor its termination explicitly mentioned FTX or Alameda. Farmington received approximately $11.5 million from Alameda Research through FBH Corporation in March 2022.
Scrutiny and Inquiry
In 2022, Senators Elizabeth Warren and Tina Smith conducted an inquiry into Farmington State Bank’s connections with FTX. They expressed concerns about the integration of crypto into the banking system and sought information on how Alameda acquired Moonstone Bank.
Hot Take: Farmington State Bank Moves Forward
Farmington State Bank has successfully concluded its wind-down plan and is no longer operating as a bank. With the Federal Reserve’s enforcement action now terminated, the bank has fulfilled its obligations and protected its depositors throughout the process. The termination of enforcement actions with BNP Paribas further highlights the regulatory efforts to ensure compliance with sanctions laws. While Farmington had connections to FTX’s Alameda Research, the enforcement action did not explicitly mention them. This development brings closure to Farmington’s involvement with crypto and allows it to move forward as a community bank.
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