Alameda-backed Moonstone Bank Making a ‘Return to Its Roots’

Sam Bankman-Fried’s Alameda Research invested $11.5 million for a stake in a tiny bank in Farmington, Washington, in March 2022 — a few days after it began doing business as Moonstone Bank. On Thursday, the bank said it will cease using the Moonstone name in a matter of weeks. 

Founded in 1887 and chartered in 1929 as Farmington State Bank, the bank’s total assets amounted to about $16.4 million by the first quarter of 2022, FDIC records show.

But by the third quarter (the most recent available data), Moonstone’s total assets had risen to nearly $100 million. Exactly what Bankman-Fried was doing, pouring millions into the 26th smallest bank in the country out of 4,800 per the New York Times, is not publicly known.

At least $50 million of the bank’s assets came from FTX, the Wall Street Journal reported, which is now in the possession of FTX’s liquidators, along with Alameda’s 10% equity stake.

One odd aspect of the FTX-connection is Moonstone’s ownership via parent company FBH Corporation, whose sole shareholder was Jean Chalopin, a French citizen and chair of the board for Bahamas-based Deltec Bank. Deltec has been known since 2018 in crypto circles as “Tether’s Bank,” for its major customer Tether Limited, and Chalopin’s acquisition of Farmington State Bank dates to around the same time, according to a November press release.

FTX was one of the largest customers of Tether and its USDT stablecoin, minting $36 billion worth, according to Forbes. Tether’s chief technology officer and chief spokesperson Paolo Ardoino told Forbes that Bankman-Fried asked for financial support “in the billions” shortly before he put FTX into bankruptcy. Tether refused.

Moonstone, where Chalopin’s son Janvier serves as chief digital officer, according to its website, issued a statement following the FTX bankruptcy saying that the Deltec chair’s involvement and interests, “are completely separate and apart from any other business owned by Mr. [Jean] Chalopin, including Deltec International Group and its subsidiaries.”

At the time, Moonstone’s statement implied it was sticking to its “technology and data-first” strategy, but in the intervening 50 days, something evidently changed.

The bank said in a statement on Thursday that it is “discontinuing its pursuit of an innovation-driven business model,” and that “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.”

The statement added that the Farmington State Bank brand has been “well-known for 135 years in the local community,” where it has operated a single branch out of the same building since 1911.

Moonstone did not immediately respond to a request for comment.

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