The president of the rural bank, Jean Chalopin, is also the president of Deltec Bank, which has Tether and Alameda on its client list. The cryptocurrency exchange FTX’s bankruptcy proceedings have revealed many new aspects of its unethical practices. The recent disclosure of his stake in one of the smallest US banks in rural Washington has raised new concerns about its operations and alleged abuse of banking loopholes. Farmington State Bank, now renamed Moonstone, is 26 years old… with a single branch and three employees.
FTX, through its now-bankrupt sister company Alameda, invested in the Rural Bank with a reported US$11.5 million investment in its parent company FBH in March 2022.
FTX’s ownership of Moonstone is seen as a move to circumvent the requirements for holding a US banking license, which many say is a rather complex task. One Reddit user wrote that getting a banking license takes a lot of work and that “buying a small bank is often a backdoor way to get a license, which would be a natural part of a business plan for something like FTX.” Another user pointed to the perceived misuse of bank gaps and crypto’s lack of regulatory oversight. Others have speculated that Sam Bankman-Fried’s political connections may also have played a role in the deal, saying:
“Given the SBF’s extensive network of political connections, I wouldn’t be surprised if they were granted this license arbitrarily.”
Aside from FTX’s stake in a US bank, the connection between the rural bank’s parent company, FBH, and another crypto entity, Tether, the largest issuer of a stablecoin in the United States, caught the cryptocurrency’s most attention. Community’s crypto market today. The president of FBH is Jean Chalopin, president of Deltec Bank, which has Tether and Alameda on its client list. After purchasing the bank in 2020, almost 100 years after it was founded, FBH sought approval from the Federal Reserve to facilitate cryptocurrency-related transactions. The bank received federal approval in June 2021, and nine months later, FTX invested in the rural bank, which now has Federal Reserve approval.
The banking connection between Tether and FTX/Alameda has become a concern for many in the crypto community, as Tether has long been under reserve testing. Tether has yet to respond to requests for comment at press time.