One of the financial institutions that did business with Sam Bankman-Fried’s empire, Moonstone Bank, is rebranding itself, getting out of crypto and refocusing on its original customer base.
Moonstone Bank, based in Farmington, Washington, has announced its exit from the volatile crypto space and related “innovation-driven” business models. A press statement released on Jan. 19 indicated it was also changing its name back to Farmington State Bank, a title it had held for 135 years.
The bank did not directly mention the FTX collapse. Still, it stated its decision to move out of crypto was driven by “recent events” in the industry and the changing regulatory landscape affecting enterprises dealing with digital assets.
Moonstone Bank maintained that its return to community banking will not cause any disruption of services for its local customers and will take effect in the next few weeks. It also reiterated its commitment to “safe and sound practices,” which it claimed had kept its books liquid and customer deposits secure.
Bank issues notice to crypto clients
Further to Moonstone’s press statement, a report from Forbes indicated the company had this week started giving notice to its crypto customers, informing them that it would be closing their accounts. According to the report, Moonstone asked clients holding digital asset accounts with the financial institution to stop transactions and move their assets to other banks.
Forbes alleges that it examined the client communications and found that Moonstone had not explained why it was closing the accounts.
The bank became the latest financial institution linked to Sam Bankman-Fried’s failed crypto empire to change its operations as criminal investigations into Mr. Bankman-Fried and his companies commenced.
Moonstone received $11.5 million from FTX’s sister company Alameda Research
Moonstone had previously specialized in serving the banking needs of the Farmington community but was reportedly acquired by Jean Chalopin, the Bahamas-based chairman of Deltec, an FTX banking partner, in 2020.
According to reports, Chalopin received an $11.5 million investment from Alameda Research in January 2022 to restructure Moonstone into a financial services company emphasizing cryptocurrencies.
The bank is one of several financial institutions that have piqued the interest of US lawmakers. In December 2022, Senator Elizabeth Warren indicated she would question banking regulators about Moonstone’s exposure to Alameda’s investment.
Furthermore, Bahamian liquidators discovered Moonstone had almost $50 million in FTX deposits spread across two accounts. According to reports, the status of these funds is still being determined. Additionally, in a motion filed in December, the Bahamian liquidators claim that Moonstone executives failed to provide specifics about the accounts when requested to do so.
Source: https://crypto.news/moonstone-bank-announces-exit-from-crypto-space/