Moonstone Bank Exits Crypto Space Due To Recent Industry Events
According to reports, a financial entity with links to FTX has left the crypto scene. Moonstone Bank has decided to rebrand itself and focus solely on traditional banking.
Moonstone Bank Leaves The Crypto Sector After FTX’s Collapse
In a recent statement, the Farmington-based bank said it would no longer focus on crypto and crypto-related business models. Also, the bank announced it would revert to the previous name it held for over 135 years, Farmington State Bank.
However, the bank, in its statement, did not talk about the FTX saga despite its dealings with the firm. The bank only said the “recent events” in the crypto space motivated it to exit the crypto industry.
Additionally, the bank cited the evolving regulatory environment that affects businesses handling digital assets. Moonstone Bank asserted that its transition back to community banking should not bother its users.
The Farmington-based bank said this action would not interrupt its services to local users. According to Moonstone, the transition will take place in the coming weeks.
Also, it promised to keep offering “sound and safe” practices to its users. Besides Moonstone’s announcement, there are reports that the bank has already informed its crypto clients about its decision.
According to these reports, the bank told its clients that it would terminate their accounts soon. Hence, Moonstone instructed clients with digital asset accounts with the financial institution to halt transactions and transfer their assets to other entities.
Alameda Research Invested $11.5 million In Moonstone
Moonstone bank is the latest FTX-linked financial institution to alter operations as criminal investigations into FTX’s executives continue. Previously, Moonstone had focused on offering only banking services to the people of Farmington.
However, its direction changed in 2020 after Deltec chairman Jean Chalopin allegedly acquired the bank. Deltec is a Bahamas-based banking firm that did business with the now-bankrupt FTX exchange.
In January 2022, reports revealed that Chalopin secured an investment of $11.5 million from Alameda Research to transform Moonstone into a financial firm specializing in crypto services. In addition, the bank is among other financial institutions that have attracted the attention of US legislators.
Last December, Sen Elizabeth Warren announced that she would inquire with banking regulators regarding Moonstone’s relationship with Alameda Research. Additionally, Bahamian liquidators found that Moonstone had over $50 million in deposits from FTX, distributed across two accounts.
Per reports, the liquidators are still determining the whereabouts of these funds. Last month, the Bahamian liquidators filed a motion against the executives of Moonstone.
They alleged that the executives have refused to provide specific details about the accounts.
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