The downfall of FTX last year brought to light many strange financial connections, with the relationship between Sam Bankman-Fried’s trading firm, Alameda Research, and the small Farmington State Bank in Washington being particularly puzzling. This modest rural bank, once known for its single branch serving the local community for decades, has since undergone a radical transformation in its business focus.
In 2020, Jean Chalopin took control of Farmington State Bank through FBH Corp., where he held an executive position. Chalopin also chaired Deltec, a crucial bank for Alameda Research, and continues to be a major banking partner for Tether, a leading stablecoin. Interestingly, Noah Perlman, Binance’s current chief compliance officer and a former official with the U.S. Department of Justice and DEA, is also listed as a director of FBH Corp., though he hasn’t commented publicly on this connection.
Farmington State Bank has undergone a major transformation following its acquisition by Charlopin’s FBH Corp. After decades of focusing on community banking, the bank has pivoted to processing cryptocurrencies and international payments. The move is considered highly unusual, especially as it appears to ignore the bank’s for-profit overseas interests.
In late December, a Federal Reserve spokesperson, Eric Kollig, chose not to comment on the regulatory process that led to the approval of Chalopin’s acquisition of the bank’s charter in 2020. Shortly after, the bank rebranded from Farmington State Bank to Moonstone Bank, a clear indication of its new direction and ambitions within the digital asset sector.
Just days after adopting the Moonstone name in early March 2022, Alameda Research, closely associated with FTX, made a significant investment of $11.5 million into the bank. This investment was more than double the bank’s total net assets at the time, dramatically underscoring Alameda’s commitment in relation to Moonstone’s modest size.
Janvier Chalopin, Jean Chalopin’s son and Moonstone’s chief digital officer, described the capital from Alameda Research as ‘seed capital…to execute on our new plan to become a tech-focused bank.’ This funding was viewed within the bank as a pivotal step in its evolution towards becoming a technology-centric financial institution.
Following Alameda’s acquisition of the bank’s stake, Jean Chalopin issued a statement saying the move “marks a recognition of the value of our purpose by one of the world’s most innovative financial leaders.” He further said, “This marks a new step towards the future of banking” and positions the small bank at the forefront of financial innovation.
Financial news outlets like Protos have highlighted the unusual nature of this deal, noting the rarity of a Bahamas-based entity like FTX acquiring a stake in a U.S. federally chartered bank without seemingly facing intense regulatory scrutiny. This apparent lack of rigorous oversight has sparked considerable discussion among industry observers.
Washington state regulators said they were “aware” of Alameda’s investment in the bank, which at the time went by names such as Farmington and Moonstone. Nonetheless, they stood by their decision at the time not to intervene or take further regulatory action, allowing the investment and the bank’s strategic transformation to proceed.
The money flowing into the revamped Farmington, now Moonstone Bank, isn’t coming exclusively from FTX/Alameda. According to a New York Times report, the bank’s deposits had hovered around $10 million for decades, but have quickly surged to $84 million in 2022. A large portion of that, $71 million to be exact, came from just four new accounts added in a relatively short period of time.
Following the announcement of the Alameda investment, Moonstone Bank appointed Ronald Oliveira as CEO on the same day. Oliveira’s background includes working at Revolut, which has been hailed as the “leading digital alternative bank” and has received funding from Jeffrey Epstein partner Nicole Junkermann. The executive appointment added another layer of mystery to the bank’s evolving structure.
Approximately two months later, the bank further bolstered its team by appointing Joseph Vincent as legal counsel. Vincent brought with him 18 years of experience from the Washington State Department of Financial Institutions, where he served as General Counsel and Director of Legal and Regulatory Affairs, adding significant expertise in state-level financial regulation to the institution.
Shortly before FTX’s collapse, Farmington/Moonstone inevitably came under scrutiny. This was after the bank had formed a partnership with a company called Fluent Finance. At the time, Fluent Finance was little known in the media and had received little attention, save for an investigation published by Unlimited Hangout in December that sought to uncover Fluent’s operations and connections.
Even after the collapse of FTX and the subsequent closure of Farmington/Moonstone’s operations in the following months, Fluent Finance continued to be active, notably establishing key partnerships with important government agencies. The company strategically focused on collaborations in the Middle East, positioning itself to play a significant role in the developing landscape of central bank digital currencies (CBDCs) across both Western and Eastern economies.
Despite its association with the now-defunct Moonstone and its subsequent successes, the limited media attention Fluent Finance has garnered is often attributed to its unique operational model. From its inception, Fluent appeared to function as a conduit for some of the world’s most influential commercial banks, actively constructing the so-called ‘trusted’ digital infrastructure necessary for the future economy. The investigation aimed to delve into Fluent’s history and development, seeking to uncover the underlying motivations behind the efforts of Chalopin, Bankman-Fried, and others to reshape the small Farmington State Bank.
The remarkable event of a major cryptocurrency player like FTX injecting millions into a small rural bank, only for it to be seized amidst the firm’s collapse, is less an isolated incident and more a dramatic, albeit brief, manifestation of a significant ongoing transformation. This entanglement sheds light on the ambitions of those striving to bridge these financial worlds and build the foundation for future digital currencies, whether they are issued by central banks or led by commercial entities.
