The mystery bank had just three employees and focused on lending money to farmers for agricultural purposes until Bankman-trading Fried’s company Alameda Research later acquired a share in Farmington; at that point, it changed its name to “Moonstone.”
Former FTX founder Sam Bankman-Fried had just under $50 million in an account with a small bank in a remote area of Washington state according to a court document released on Friday.
Prosecutors said that on January 4 they seized $49,999,500 that Bankman-Fried had deposited with Farmington State Bank, as part of an effort to track down nearly $700 million worth of assets for forfeiture.
Bankman-Fried’s Alameda Research trading firm bought an $11.5 million stake in Farmington in March last year – which accounted for more than double the bank’s entire net worth at the time. Until then, the little known bank had been the US’s 26th-smallest out of around 4,800. It’s based in Farmington, WA – which has just 146 residents and is so small that Google Street View doesn’t even cover the whole town.
Farmington had just three employees, specialized in agricultural loans to farmers, and didn’t offer online banking or credit cards at the time of Bankman-Fried’s investment, according to a November New York Times report. At the time of the NYT report, the bank said it had 32 employees and a $115 million valuation “consistent with other similar technology banks and trust-banks startups”. The bank trademarked the name “Moonstone” a few days before Alameda’s investment and until recently was listed as “Moonstone Bank” online.
While its website didn’t mention cryptocurrencies directly, it said it wanted to “support the evolution of next generation finance”. The tiny rural bank said last week that it’d be retiring the Moonstone name and returning to its roots as a community bank, with crypto hit by waves of high-profile bankruptcies and liquidity crises over the past year.
“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 businesses,” Farmington said in a statement published January 18.
Federal prosecutors are working to track down assets held by Bankman-Fried, who pleaded not guilty to eight charges of fraud earlier this month and is scheduled to face trial in October. They allege that he used FTX customers’ money to prop up Alameda. As well as the cash he had deposited with Farmington, they have seized just over $100 million in an account with the crypto-focused bank Silvergate Capital and $21 million with the brokerage firm ED&F Man Capital Markets.
US authorities also seized around 55 million Robinhood shares, worth $526 million as of Friday’s closing bell, and are investigating crypto and cash held by Bankman-Fried in three accounts with rival crypto exchange Binance.