Prosecutors Seize $50M Of Bankman-Fried's Funds From Controversial Bank

The U.S. prosecutors have seized nearly $50 million in cash connected to Sam Bankman-Fried, the disgraced founder and former CEO of the controversial centralized crypto derivatives exchange that imploded last year and prolonged the winter season in the cryptocurrency market.

The money was seized from a little-known bank named Farmington State Bank, which is located in rural Washington state, court filings revealed.

"$49,999,500 in U.S. currency formerly on deposit in Account Number 9000-1924-02685 at Farmington State Bank d/b/a "Moonstone Bank" held in the name of "FTX Digital Markets" seized by the Government on or about Jan. 4, 2023," prosecutors reported.

The bank, which only has three employees, specializes in agricultural loans to farmers and did not offer credit cards or online banking services at the time when Bankman-Fried deposited almost $500 million.

Before the disgraced FTX founder made his deposit, Farmington State Bank's net worth was only $5.7 million.

But, in March 2022, Alameda Research, the hedge fund founded by Bankman-Fried, bought an $11.5 million stake in Farmington, which is twice the bank's total net worth.

Following the spectacular collapse of FTX, the New York Times reported that Farmington has been collecting around $10 million in deposits over a decade, which increased to $84 million by Q3 2022.

Of the $84 million, the report claimed that $71 million came from new accounts.

With its unprecedented growth, the almost unknown bank, which was the 26th-smallest out of around 4,800 banks, changed its name to Moonstone Bank and its website, although does not mention crypto, suggested it wanted to "support the evolution of next-generation finance."

Last week, the state bank mentioned it would retire the Moonstone name and would revert to its roots as a community bank.

"The change in strategy reflects the impact of recent events in the crypto assets industry and the resultant changing regulatory environment relating to crypto asset businesses," Farmington State Bank said in a press release.

The nearly $50 million assets in Farmington State Bank are just one of the multiple assets prosecutors seized last week, which collectively amounted to approximately $400 million.

U.S. prosecutors are also looking into the investment made by Bankman-Fried at Modulo Capital, a hedge fund, which is located in the compound where the house of the embattled FTX founder in the Bahamas is located.

Authorities are investigating the $400 million investment Bankman-Fried made in the days leading to the spectacular implosion of his crypto empire.