• Prosecutors seized roughly $50 million from FTX founder SBF’s deposit to Farmington State Bank on Jan. 4
• Alameda Research, SBF’s venture capital, had previously invested $11.5 million in the bank in March 2022
• The bank had only three employees when SBF deposited the amount and changed its name to Moonstone Bank after the investment
On January 4th, prosecutors seized just under $50 million from FTX founder Sam Bankman-Fried (SBF) which was held in Farmington State Bank. This was only $500 short of the amount deposited. The bank specialized in agricultural loans to farmers and had only three employees when SBF made the deposit.
Alameda Research, SBF’s venture capital, had previously invested $11.5 million in the bank in March 2022. This investment saw the bank change its name to Moonstone Bank, as well as the addition of online banking services.
Prior to FTX’s investment, the bank had been steadily collecting about $10 million in deposits for a decade. By the third quarter of 2022, this amount had increased to $84 million. Of this increase, $71 million came from new accounts.
The former head of the Independent Community Bankers of America, Camden Fine, shared his thoughts on the investment. He said: “The fact that an offshore hedge fund that was basically a crypto firm was buying a stake in a tiny bank for multiples of what it was worth just a few years ago is pretty remarkable.”
The seizure of the $50 million deposit was a shock to the small bank, which had only three employees at the time of SBF’s deposit. It is unclear why the prosecutors decided to seize the money, but it is likely that it was done in connection with a criminal investigation. It is also unclear what will happen to the seized funds, but it is likely that the money will be returned to SBF in due course.