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FTX owned small bank in Washington – crypto.news

FTX Issues a Scam Alert after Allegations of Unlawful Operations by UK Financial Regulator

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More questions have arisen about FTX since then found that the defunct cryptocurrency powerhouse had an $11.5 million stake in one of the smallest banks in the United States, more than doubling the bank’s previous net worth.

The company’s CEO at the time, John Widman, told the newspaper that the company had stopped issuing mortgages because the documentation required too much manpower. The bank didn’t even issue credit cards or offer online banking.

More concerns about the operation of FTX

This relationship between the bank and the death of FTX has raised new questions about the exchange and its operations. They include: How well is FTX based in the Bahamas integrated into the mainstream financial system? What else could the authorities have overlooked?

The cryptocurrency company’s bankruptcy case highlighted FTX’s investment, which raises questions about its financial planning.

The farmers’ bank and the cryptocurrency exchange began working together in March of this year after FTX’s sister company Alameda Research invested in Farmington’s parent company, FBH. Ramnik Arora, a member of Fried’s circle within Sam Bankman, who often oversaw significantly larger deals, was in charge of the acquisition.

It was the 26th smallest among 4,800 American banks at the time. FTX’s investment was worth more than the bank’s net worth of $5.7 million.

About Farmington

The Farmington bank had about $10 million in deposits over a ten-year period. Deposits grew to $84 million in the third quarter of this year, with just four accounts accounting for 85 percent, according to FDIC figures cited by the Times.

The bank is currently known online as “Moonstone Bank”, which was registered as a trademark a few days before FTX’s investment. Moonstone says it plans to “facilitate the emergence of the next generation of finance,” but doesn’t mention cryptocurrencies.

Farmington is connected to several crypto networks. The bank was acquired by FBH in 2020. In addition to being the chairman of Deltec Bank, which, like FTX, is headquartered in the Bahamas, Inspector Gadget creator Jean Chalopin also serves as the chairman of FBH. Deltec’s most famous client is Tether, a cryptocurrency company with $65 billion in assets that offers a stablecoin pegged to the dollar.

Tether has long struggled financially due to isolated founders and offshore bank accounts. There were fears that the stablecoin would be linked to FTX’s fraudulent activities without anyone being aware of it, as FTX was one of Tether’s main trading partners through Alameda.

Before the merger, Farmington’s deposits were stable at about $10 million. But in the third quarter of this year, the bank’s deposits grew about 600 percent to $84 million. Just four new accounts, or $71 million, or about the entire increase, according to FDIC data

Does FTX obtain a banker’s license legally?

What FTX thought of Farmington is unclear, and Farmington is currently known as Moonstone. However, it is not certain how FTX obtained a banking license in the United States, which would require approval by federal regulators. Experienced banking professionals find it hard to believe that the authorities would have knowingly allowed FTX to obtain a US banking license.

Concerns have been raised about how FTX received federal approval to acquire its Farmington stake. Banking professionals told the New York Times that it is unlikely that regulators would have voluntarily allowed a cryptocurrency firm to operate in this manner.

FTX and Moonstone did not immediately respond to a request for comment outside normal US business hours.



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