Federal prosecutors have seized $50 million from Farmington State Bank — the rural one-location Washington state-based bank that received a multimillion-dollar investment from FTX sister company Alameda Research a year ago, according to court documents that were unsealed last week. Prosecutors also seized about $100 million from California-based Silvergate Capital.
Federal prosecutors seized the Farmington funds Jan. 4 from an account labeled “FTX Digital Markets” as part of its investigation into FTX founder Sam Bankman-Fried, who has been charged with wire fraud, commodities fraud and other counts, according to The Spokesman-Review.
“I really can’t talk about that, whether it’s about our existing customers or the impacts,” Josey Booth, Farmington’s director of business operations, told the Spokesman-Review on how the $50 million seizure affects the bank. “What I can say is the financial information about banks is public.”
At the time of the seizure, the bank was still doing business as Moonstone Bank. The bank last week reverted to its Farmington brand and said it was exiting the crypto and cannabis spaces in favor of returning to its “original mission as a community bank,” thus “discontinuing its pursuit of an innovation-driven business model.”
Booth said in a prepared statement that the change “reflects the impacts of recent events in the crypto assets industry and the resultant changing regulatory environment relating to crypto asset businesses,” and emphasized that Farmington customers would be unaffected.
Booth told the Spokesman-Review that employee headcount remains the same at Farmington. A filing with the Federal Deposit Insurance Corp. (FDIC) showed Farmington had $98.9 million in total assets as of September.
Farmington adopted the Moonstone name early last year after Bankman-Fried invested in it. That investment came about through Bankman-Fried’s connection with FBH Chairman Jean Chalopin, who also leads Bahamas-based Deltec Bank. FBH is the parent company to Farmington State Bank.
The seizure of more than $100 million Thursday from Silvergate included $94.5 million from an account labeled FTX Digital Markets, and an additional $7 million from accounts associated with Bankman-Fried, Reuters reported.
Silvergate, which reported in December that its assets totaled approximately $4.6 billion, laid off 40% of its staff this month, attributing the cuts to current “economic realities.”
Silvergate and Farmington State Bank did not return requests for comment by press time.
Bankman-Fried pleaded not guilty Jan. 3 to all charges and awaits his October trial on house arrest at his parents’ California home.
He’d previously owned up on Twitter to “fuck[ing] up” at the helm of FTX, which was one of the largest crypto exchanges in the world before spiraling into bankruptcy in November. However, he’s said publicly he doesn’t think he “personally” has criminal liability in FTX’s downfall.
