- At the time, a small bank with just 3 employees held an account worth $50 M owned by Sam Bankman-Fried.
- Alameda also invested $11.5 million in the bank.
- Prosecutors are trying to take hold of all assets held by SBF.
Former crypto white knight and ex-FTX CEO Sam Bankman-Fried is in the crosshairs for his deeds in the FTX saga. As per court filings published on Friday, one incident came to light: SBF held an account with a little-known bank in rural Washington state called Farmington State Bank of approximately $50 million.
Farmington State Bank
On January 4, 2023, prosecutors seized $49,999,500 that was deposited in the bank; this exercise was a part of tracking down almost $700 million worth of assets. Alameda also bought a stake in Farmington worth $11.5 million in March 2022. The investment was nearly double the bank’s entire net worth at the time.
At the time of investment, the bank was ranked as the 26th smallest bank out of 4,800. Based in Farmington, Washington, the town had only 146 residents, and Google Street View did not cover the whole town due to its size.
According to the reports by New York Times, the bank had only three employees and specialized in agricultural loans to farmers; the bank did not offer facilities like online banking or credit cards when SBF invested. The bank is supposed to have 32 employees and a valuation of $115 million and is at par with other banks with similar technologies and trust-banks startups.
Bank trademarked the name “Moonstone” just a few days before Alameda’s investment and was listed as “Moonstone Bank” online recently. Although their website does not mention cryptocurrencies directly, it says they want to “support the evolution of the next generation finance.”
Just last week, the small bank announced scraping off of the Moonstone name and returning to square one as a community bank; this could be because the crypto industry is badly affected by the numerous high-profile bankruptcies, liquidity crunches and drought-like situation in trading volumes affecting the industry in 2022.
According to the statement issued by Farmington on January 18:
“The change in strategy reflects the impact of recent events in the crypto assets industry and the resultant changing regulatory environment relating to crypto asset business.”
SBF & the FEDs
It is known that SBF had pleaded not guilty to all eight counts of wire fraud and conspiracy charges, and federal prosecutors are trying hard to track down his assets. With the case expected to be on the floor by October 2023, Feds say that Sam used FTX customers’ money to fuel Alameda.
Along with the assets at Farmington, prosecutors have also seized over $100 million from Silvergate accounts; the crypto bank is also under question for allegedly participating in the act. Another $21 million were from ED&F Man Capital Markets, a brokerage firm.
United States authorities also took hold of 55 million Robinhood shares, which amount to $526 million. They are working tirelessly, investigating crypto and cash held by Bankman in three accounts held at the world’s largest crypto exchange.
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