A bank linked to FTX changed its business plan without letting supervisors know, the Federal Reserve said in an enforcement action.
“The Board's action ensures the bank's operations will wind down in a manner that protects the bank's depositors and the Deposit Insurance Fund. The action also prohibits Farmington and FBH from making dividends or capital distributions, dissipating cash assets, and engaging in certain activities without approval from its supervisors,” the central bank said.
"While the banking system has so far been relatively unscathed by the latest crypto crash, FTX's collapse shows that crypto may be more integrated into the banking system than regulators are aware,'' the letters said. The Federal Reserve, along with the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corp. issued ato banks in January following the collapse of FTX, reminding them of their safety and soundness obligations and outlining risks in the crypto sector.
Disclaimer: The former CEO and majority shareholder of The Block has disclosed a series of loans from former FTX and Alameda founder Sam Bankman-Fried. © 2023 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
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