Federal Reserve Takes Action Against Farmington State Bank for Undisclosed Digital Asset Activities

The Federal Reserve Board has issued enforcement action against Farmington State Bank for engaging in undisclosed digital asset activities. The bank, also known as Moonstone Bank, will be required to wind down its operations. The Fed claims that Farmington made a sudden transition to a pro-digital assets business plan without notifying supervisors or obtaining approval. As a result, the bank is now restricted from making dividends or capital distributions, dissipating cash assets, and engaging in specific activities without prior approval from supervisors.

Farmington State Bank undertook digital assets-related activities without knowledge or approval
The bank changed its business plan in 2022 without notifying supervisors
The Fed and Washington State Department of Financial Institutions have restricted the bank’s activities
Farmington State Bank previously committed to abstain from digital banking operations
The bank collaborated with a third party to establish an infrastructure for stablecoin issuance

FTX Founder Sam Bankman-Fried Faces New Charges Including Embezzlement

The founder of FTX, Sam Bankman-Fried, is facing new allegations from the Department of Justice. Bankman-Fried is accused of misappropriating and embezzling customer deposits from FTX, using the stolen funds for personal investments, acquisitions, and political campaign contributions. These charges come after Bankman-Fried was sent back to jail for alleged witness tampering. US District Judge Lewis Kaplan determined there was probable cause to believe the defendant attempted to tamper with witnesses on multiple occasions.

FTX founder Sam Bankman-Fried accused of embezzling customer funds
Bankman-Fried used stolen funds for personal investments, acquisitions, and campaign contributions
New charges came after Bankman-Fried was sent back to jail for witness tampering
The defendant allegedly attempted to tamper with witnesses on multiple occasions

Hot Take: Federal Reserve Crackdown on Undisclosed Digital Asset Activities

The Federal Reserve’s enforcement action against Farmington State Bank highlights the importance of transparency and regulatory compliance in the cryptocurrency industry. Undisclosed activities and sudden changes to business plans without proper approval can have serious consequences for banks and their stakeholders. This case serves as a reminder that regulatory bodies are actively monitoring and taking action against potential violations. It also raises questions about the role of third-party collaborations in facilitating digital asset activities. The charges against FTX founder Sam Bankman-Fried further underscore the need for accountability and ethical conduct within the crypto space.