The Fed announced on Tuesday that it has terminated a key enforcement action against Farmington State Bank. Fermington is a Washington-based community bank that was connected to the failed cryptocurrency exchange FTX.
The Fed’s enforcement action, which had been in effect since July 2023, ensured that Farmington would wind down operations in an orderly manner that protected depositors’ funds. With the wind-down plan now completed, Farmington “no longer functions as a bank,” the Fed stated.
“The Board’s enforcement action, which has been in effect since July 2023, ensured the bank’s operations would wind down in a manner that protected the bank’s depositors.” the Fed wrote in its press release.
- The Fed initiated enforcement action against Farmington and its holding company, FBH Corporation, in July 2023.
- As part of the enforcement action, Farmington agreed to exit the crypto sector and return to operating as a traditional community bank.
- With the wind-down of crypto activities complete, the Fed terminated its enforcement orders against Farmington and FBH on Tuesday.
Fed ends two enforcement actions against Farmington
Farmington was formerly known as Moonstone Bank before it changed its strategy to pursue an “innovation-driven business model.” The transition focused on digital assets came after the bank received an investment of $11.5 million from FTX’s sister company, Alameda Research, in March 2022.
However, the Federal Reserve did not directly mention FTX or Almada in its enforcement action against Farmington. The Fed also stated on Tuesday that it has ended two enforcement actions against BNP Paribas related to compliance with U.S. sanctions laws. Those orders had been in place since June 2014.