US bank is forced to liquidate and sell off its loans and deposits after important update on customer’s money is issued
A BANK suspected of having links to the bankrupt cryptocurrency company FTX has been forced to liquidate.
Farmington State Bank in Washington State is winding down its operations after being ordered by the feds.
Federal Reserve Board officials have accused the company of changing its business operations without informing supervisors and getting the necessary approval.
The bank is accused of engaging in crypto-related activities, as reported by FX Street.
Josey Booth, the director of business operations for Farmington, told The Spokesman-Review earlier this month that the branch will be closing.
Officials have said they’ve sent emails to customers informing them that the bank is shutting down.
Farmington will sell its loans and deposits to the Bank of Eastern Oregon and the deal is expected to be wrapped up by August 31.
A spokesperson for the business said in a press release: “Farmington State Bank looks forward to working with the Federal Reserve and the Washington DFI on the orderly liquidation and wind down of the bank.”
They said that the organization has “consented” to the order issued by the Federal Reserve Board.
Federal Reserve Board officials have ordered officials at the bank to keep records and pause the destruction of documents amid the ongoing probe.
Farmington had close links to Alameda Research – a company that was co-founded by the suspected fraudster Sam Bankman-Fried.
In January, it was reported that $50million was seized from the bank by federal prosecutors, per The Spokesman-Review.
Alameda invested $11.5million in the bank last year, as reported by The New York Times.
At the time of the investment, Farmington was the 26th smallest bank in the US and had just three employees before 2022.
Bankman-Fried is accused of defrauding investors and re-routing millions of dollars worth of crypto from customers using his FTX exchange system. He has pleaded not guilty to the charges.
The shamed investor is also accused of using the money he allegedly stole from customers to make more than $100million in political campaign contributions.
Prosecutors said: “He [Bankman-Fried] leveraged this influence, in turn, to lobby Congress and regulatory agencies to support legislation and regulation he believed would make it easier for FTX to continue to accept customer deposits and grow.”
Bankman-Fried is currently being holed up in a Brooklyn federal jail and he will face trial on seven charges in October.
In 2022, Gary Gensler, the chairperson of the US Securities and Exchange Commission, said: “We allege that Sam Bankman-Fried built a house of cards on a foundation of deception while telling investors that it was one of the safest buildings in crypto.”
