Federal Reserve Ends Enforcement Action on Farmington Bank

According to Blockworks, the Federal Reserve has ended its enforcement action against Farmington Bank, which is linked to Sam Bankman-Fried. The decision comes after the bank wound down operations and no longer functions as a bank. The enforcement action, in effect since July 2023, ensured that the bank's operations would wind down in a manner that protected its depositors. In August, the Fed announced that it had taken action against Farmington for improperly changing its business model and failing to inform the central bank. FBH Corporation, the bank's holding company, was also named in the now-terminated enforcement action. Farmington had consented to the Federal Reserve order at the time. According to the Fed, Farmington committed to designing the IT infrastructure and working with a third party to facilitate the issuance of stablecoins to the public in exchange for receipt of 50% of mint and burn fees on certain stablecoins. The bank briefly operated under the name Moonstone Bank and was tied to Alameda and Sam Bankman-Fried, although both were absent from the enforcement action. Alameda invested $11.5 million into the bank. Farmington announced last year that it was changing its name back and discontinuing its pursuit of an innovation-driven business model. The strategy shift reflects the impact of recent events in the crypto assets industry and the changing regulatory environment relating to crypto asset businesses.