Moonstone Bank to Exit Crypto Industry after FTX Failure

Following the collapse of FTX, the company has decided to rebrand and exit the crypto space.

A small rural bank in Washington state called Moonstone Bank has declared that it will stop dealing in cryptocurrencies and go back to its original goal of operating locally. Alameda Research, a subsidiary of FTX, made an estimated $11.5 million investment in the bank.

The bank announced in a statement on January 18 that the change in strategy is due to “recent events in the crypto assets business and the growing regulatory environment around crypto asset enterprises.”

The bank announced that as part of its commitment to “return to its roots,” it will discontinue using the name Moonstone Bank and will instead rebrand and use the name Farmington State Bank, which has been well-known in the region for 135 years.

The bank states that there won’t be any service interruptions for local banking customers when the transition goes into force in the upcoming week.

Although the bank did not expressly mention the demise of FTX in its decision to restructure and rename, it is widely believed that these two incidents may be connected.

Alameda Research reportedly gave Chalopin a $11.5 million investment in January 2022 to convert Moonstone into a financial services firm with a focus on cryptocurrencies.

The rapid collapse of FTX looks to be affecting an increasing number of banks, including Farmington State Bank.

In order to fund the $8.1 billion in customer withdrawals as a result of the FTX debacle, Silvergate reportedly had to sell off assets at a loss and decrease staff by 40%. Due to this, Silvergate let go of around 200 employees, or 40% of the whole workforce. Additionally, the bank gave up on its ambitions to launch a project to develop its own digital currency.