FTX-Linked Farmington State Bank Faces Federal Reserve Enforcement Action

Farmington State Bank, linked to FTX, has been ordered by the Federal Reserve Board to wind down its operations after engaging in digital assets-related activities without notifying or obtaining approval from its supervisors. The bank had promised to avoid digital bank operations and modify its business plan, but allegedly worked with a third party to facilitate the issuance of stablecoins. The enforcement action prohibits the bank from making dividends or capital distributions without permission. Earlier this year, federal prosecutors seized $50 million from Farmington, alleging it was part of a scheme to defraud crypto investors.