Fed ends enforcement action into SBF-linked Farmington Bank
The Federal Reserve is ending its enforcement action into the Sam Bankman-Fried linked Farmington Bank.
The announcement came after the Fed said that the Bank had wound down operations and “no longer functions as a bank.”
“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,” a press release said.
When the Fed announced in August that it had taken action against Farmington, it said Farmington had “improperly” changed its business model and failed to inform the central bank. It also named FBH Corporation, its holding company, in the now-terminated enforcement action.
Farmington said, at the time, that it “consented to the Federal Reserve order.”
Read more: Federal Reserve takes enforcement action on Farmington bank, citing stablecoin venture
Farmington, according to the Fed, made a commitment to design the IT infrastructure and work with a third party to “facilitate” the “issuance of stablecoins to the public in exchange for receipt of 50% of mint and burn fees on certain stablecoins.”
The bank operated under the moniker Moonstone Bank for a brief period. It was tied to Alameda and Sam Bankman-Fried, though both were absent from the enforcement action.
Alameda invested $11.5 million into the bank.
Farmington announced last year that it was changing its name back and “discontinuing its pursuit of an innovation-driven business model.”
The strategy shift, it added, “reflects the impact of recent events in the crypto assets industry and the resultant changing regulatory environment relating to crypto asset businesses.”
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