When Jean Chalopin applied to buy a tiny bank in Washington state nearly three years ago, he made modest promises to bring not-so-new innovations such as ATM cards to a place with few local banking options. Farmington State Bank’s business plan wouldn’t change, Chalopin, a onetime TV and film producer who co-created the “Inspector Gadget” cartoon, assured federal regulators in documents viewed by the Wall Street Journal. But it wasn’t long before the bank got a new name, Moonstone, and new target customers in the high-risk cryptocurrency and cannabis industries. It also got a new shareholder: Sam Bankman-Fried’s crypto-trading firm, Alameda Research LLC. Alameda paid $11.5 million for a stake in Moonstone at a roughly $115 million valuation, which was 37 times the $3.1 million Mr. Chalopin paid for the bank 18 months earlier. Executives from Mr. Bankman-Fried’s crypto exchange, FTX, discussed using the bank to offer interest-bearing crypto accounts and lend out depositors’ digital assets. Bankman-Fried’s crypto empire collapsed in November, thrusting the little-known bank into the spotlight. Lawmakers are pressing for information about whether Alameda used FTX customer funds to pay for its stake in the bank. Mr. Chalopin, a pair of Democratic senators noted in a letter to banking regulators in December, chairs Deltec International Group, the crypto-friendly Bahamian bank with close ties to FTX. Last week, the new management team steering FTX through bankruptcy asked a judge to approve a subpoena for records related to Moonstone from Mr. Bankman-Fried and other FTX insiders. The Justice Department in early January seized about $50 million that an FTX entity held at Moonstone — about 77% of the total deposits the bank reported holding at the end of 2022. Moonstone said it is getting out of crypto and cannabis and returning to its community-banking roots.
