Moonstone Bank, a Washington-based banking institution, is considering leaving the crypto world. The rural bank had received an approximate $11.5M worth of investment from Alameda Research (the sister company of FTX crypto exchange).
The platform has reportedly stated that it will return to its initial mission related to community banking.
FTX-Connected Moonstone Bank Considers Leaving Crypto Industry
The banking company has mentioned in a statement that the modification in its plan is a consequence of the previous incidents in the market of crypto assets. It added that the altering regulatory climate around the businesses in the crypto world has also played a significant role in the current outcomes.
As included in the banking organization’s endeavors to go back to its earliest operations, it will not utilize the name Moonstone Bank. It also mentioned that it will rebrand in addition to re-adopting the former name “Farmington State Bank.
With this name, it was known in the native community for nearly 135 years. As per the bank, the modification will expectedly be implemented in the next weeks.
While all this takes place, it has assured the consumers that they will not witness any disruption in the services of the bank. The platform did not directly mention the crash of the crypto exchange FTX as a factor partly credited for its move to rebrand and re-strategize.
However, it appears that these incidents may have a connection. The acquisition of Moonstone Bank took place back in 2020.
Jean Chalopin, who is Deltec’s chairman, acquired the banking institution. Deltec is another banking collaborator of FTX. As pointed out in the reports, $11.5M worth of investment was secured by Chalopin in 2022’s January from Alameda Research.
This move was carried out to convert Moonstone into a platform dealing with financial services related to crypto assets.
Farmington State Bank seems to be included in the series of banking organizations influenced by the abrupt debacle of the centralized crypto exchange FTX. On the 5th of January, it was reported that the crypto exchange’s fiasco has pushed Slivergate toward a bank run.
This compelled the firm to sell off several assets. Subsequently, the firm went through a loss. In addition to this, it minimized its staff members by nearly forty percent.
Former Chief Lawyer of FTX Raises Allegations against US Legal Counsel
This step was focused on covering approximately $8.1B worth of client withdrawals. In this way, almost 200 workers were eliminated by the company. Apart from that, the banking canceled the respective strategy to introduce its separate product dealing with digital currency.
On the other hand, Daniel Friedberg (a former chief lawyer of FTX) has raised allegations against the crypto exchange’s US general counsel.
As per the allegations, the FTX’s US general counsel was allegedly engaged in directing business to the exchange’s present bankruptcy counsel named Sullivan & Cromwell (S&C).
Daniel Friedberg served FTX till his resignation on the 8th of November. The filing played the role of a declaration supporting the objection of the FTX creditor to the strategy of FTX to keep S&C as the firm’s lawyer during the bankruptcy lawsuit.
Friedberg asserted that Ryne Miller – a chief counsel of FTX.US and S&C’s former collaborator – directed the business to his previous law company across several cases. The respective filing is just a declaration supporting an objection raised by the FTX creditors to dismiss S&C from counseling FTX in its bankruptcy.
