Swiss Financial Regulator Closes FlowBank and Begins Bankruptcy Proceedings
FlowBank, an online Swiss bank known for offering customers exposure to cryptocurrencies, has been shut down and placed into bankruptcy by Switzerland’s financial regulator.
The Swiss Financial Market Supervisory Authority (FINMA) announced its decision on Thursday, stating that FlowBank “no longer had sufficient capital for its operations as a bank” and had “significantly and seriously breached” minimum capital requirements. FINMA also expressed “well-founded concerns that the bank is currently over-indebted,” with “no prospect” of restructuring.
In a letter to customers posted on FlowBank’s website, the bank confirmed that FINMA’s decision to shut it down was made on Wednesday. FINMA has appointed the top Swiss law firm Walder Wyss to serve as bankruptcy liquidators for the bank.
FlowBank, which launched in 2020, had extensive ties to the cryptocurrency industry. In 2021, crypto asset manager CoinShares acquired a 9% stake in the bank for $11.8 million, after which the bank began offering customers the ability to buy, sell, and hold crypto and other tokenized assets directly through their FlowBank accounts.
Earlier this year, reports indicated that Binance, the world’s largest crypto exchange, was allowing larger traders to hold their crypto assets at FlowBank or another crypto-friendly Swiss bank, Sygnum.
According to a document posted on FINMA’s website, FlowBank customers with deposits up to 100,000 Swiss francs (approximately $111,710) are considered protected and will receive their funds within seven working days. The future of customers’ crypto deposits, however, remains uncertain. FINMA stated that it is up to the liquidator to determine whether cryptocurrencies are classified as custody assets, which will be treated like securities in the bankruptcy process, or as “claims on the bank.”
FlowBank could not be reached for comment. All webpages for the bank now route to the letter informing clients of the bank’s shutdown, and the bank’s Twitter account has been deactivated.
Source: https://www.coindesk.com/policy/2024/06/13/swiss-regulator-shutters-crypto-linked-flowbank-begins-bankruptcy-process/