• Moonstone Bank, a digital bank focused on high-net-worth individuals, announced that it is exiting the crypto space and refocusing on the “community bank” role.
• The change is attributed to the recent developments in the crypto industry and the resulting rise in regulatory scrutiny.
• Moonstone was acquired by Jean Chalopin in 2020 and has been closely tied to crypto exchange FTX.
Moonstone Bank, a digital bank focused on serving high-net-worth individuals, has revealed that it is exiting the crypto space and will be refocusing on the “community bank” role. The decision to discontinue its plans to develop banking services for innovative industries like crypto was largely a result of recent developments in the industry and the subsequent rise in regulatory scrutiny.
Moonstone is perhaps best known for being acquired by Jean Chalopin, the Bahamas-based chairman of Deltec, another FTX banking partner, in 2020. Chalopin had big plans for the bank and sought to transform it into a crypto-focused financial services firm. To this end, he secured an $11.5 million investment from Alameda Research, the trading arm of Sam Bankman-Fried’s crypto exchange FTX, in early 2022. The firm also had close ties to executives at FTX, and has been dragged into the exchange’s saga.
As part of the shift in strategy, the bank will no longer use the name Moonstone Bank and will be rebranding and re-adopting the Farmington State Bank name, known in the local community for 135 years. In a Thursday press release, Moonstone Bank said: “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.”
The decision to exit the crypto space is likely to have a major impact on the industry, as Moonstone was one of the few banks that had ventured into the space. It is yet to be seen how other banks will respond to the changes, but it is likely that the increased regulatory scrutiny will continue to be a challenge for crypto businesses.