FTX, Moonstone Bank, and the CIA’s “Bank of Crooks and Criminals”

A half century later, Sam Bankman-Fried and FTX have eerie parallels to Agha Hasan Abedi and his Bank of Credit and Commerce International.

It’s like poetry … it rhymes. Jimmy Carter with Agha Hasan Abedi in an undated photograph. Bill Clinton and Sam Bankman-Fried, 2022. (Coindesk/Danny Nelson)

Ten days later, I may have actually recovered from the Sam Bankman-Fried trial – but there are still threads to pull.

One of those threads, obscure but intriguing, involves Alameda Research’s effort to take partial control of the miniscule Farmington State Bank – which its new owners briefly renamed Moonstone Bank. In the wake of the FTX collapse, Farmington/Moonstone has been sold off – yet another example of how children with too much money destroy perfectly good businesses. For a thorough and up to date review on Moonstone, I strongly recommend this recent episode of Crypto Critics’ Corner.

The takeover of Farmington didn’t work out for FTX, or its partners at Deltec Bank in the Bahamas. But the incident is extremely interesting for the ways it echoes a similar episode in a different notorious financial fraud – the attempted takeover of the U.S. bank Financial General (and its U.S. banking charter) by the Bank of Credit and Commerce International in the 1970s.

Like FTX, BCCI was an offshore entity that consciously avoided regulation. It would later be revealed that, like FTX, BCCI used deposits from average customers to fund influence-peddling, including through large “loans” to friendly state leaders. All of this was in service of the creation of a vast criminal money laundering operation at BCCI that served everyone from kleptocrats trying to get money out of their home states, to drug cartels moving vast sums of illegal revenue. This is why U.S. intelligence figures sometimes referred to it as “The Bank of Crooks and Criminals International.” (For this and most BCCI material, I rely on James Ring Adams and Douglas Frantz’ captivating book A Full Service Bank.)

There was one key element to the BCCI affair that we haven’t (yet) seen evidence of at FTX: the direct involvement of the U.S. Central Intelligence Agency.

The frontman for BCCI’s efforts to acquire Financial General was a known CIA asset named Kamal Adham. CIA officials later admitted they had used the bank to move funds used in clandestine operations. And when U.S. Customs began an investigation into BCCI’s activities (as retold in the 2016 Brian Cranston movie The Infiltrator), a 1992 report to Congress claimed that the CIA actively interfered with that investigation.

All of this more than vaguely invites comparison with FTX and Sam Bankman-Fried’s cozy relationship to some present and former U.S. government officials, and his efforts to deepen those relationships. They also, more nebulously, invite scrutiny of Bankman-Fried’s possible connections to the intelligence community through his parents’ employer, Stanford University, and the surrounding community of Palo Alto.