FTX had stakes in a small US bank, and many are suggesting that this is how FTX obtained its banking license.
Recent reports show that FTX had stakes in Farmington State Bank of Washington State. The bank, which is now named Moonstone Bank, is one of the smallest banks in the United States. Apparently, FTX invested around $11.5 million through Alameda toward the company earlier this year. The bank itself is very small and reportedly has around five employees. Hence, many questioned the $11.5 million investment when the bank was worth less than $6 million.
In order to obtain a banking license, a company has to undergo several long procedures which take quite some time. However, when FTX had stakes in the rural bank, it skipped all those procedures and immediately got a banking license.
After these reports emerged, the crypto community reacted negatively toward the banking system in the US. FTX’s banking license showed one of the many loopholes that the banking system in the US has. Therefore, many reacted regarding FTX’s involvement.
Some even suggested that because of the political contributions that SBF made during presidential elections and midterm elections, FTX was able to get the banking license.
Moreover, details regarding the connection between the bank’s parent company FBH with Tether, the largest stablecoin in the market, brought more concerns for the crypto community.
Tether received a lot of criticism lately. This comes primarily because it is not audited yet and has the potential to largely affect the market. We’ll have to wait and see what happens with Tether as well as the Farmington State Bank regarding their involvement with one another, considering that the bank has ties with Alameda and FTX.