Swiss regulator forces crypto-friendly FlowBank into bankruptcy

Brayden Lindrea8 hours agoSwiss regulator forces crypto-friendly FlowBank into bankruptcyThe Switzerland-based bank reportedly had ties to the TrueUSD stablecoin issuer, Techteryx, crypto asset manager CoinShares and Binance.2387 Total views5 Total sharesListen to article 0:00NewsOwn this piece of crypto historyCollect this article as NFTJoin us on social networksFlowBank, an online Swiss bank that offered cryptocurrency trading services, has been shut down and forced into bankruptcy after the Swiss financial regulator found it “seriously breached” standards required to operate as a bank.

“This measure became necessary as the bank no longer has the minimum capital required for its business operations,” the Swiss Financial Market Supervisory Authority (FINMA) said in a June 13 statement.

There’s “no prospect of a restructuring,” and there are “fears that the bank is over-indebted,” FINMA added.

“The bank must be wound up,” FINMA concluded after finding the bank “seriously breached” its obligation to hold sufficient capital upon an investigation last week.Source:Yves Genier

FlowBank launched in 2020, offering crypto trading services. It was also the banking partner for Techteryx, the stablecoin issuer behind TrueUSD (TUSD).

It was part-owned by crypto asset management firm CoinShares and reportedly offered banking services to Binance, the world’s largest crypto exchange.

Customers with up to 100,000 Swiss francs ($111,710) in funds will be protected first, stressed FINMA, which will aim to help customers recoup those funds “as quickly as possible.”

FlowBank has Swiss francs 680 million ($760 million) in total assets, holds more than 22,000 client accounts and employs around 140 staff worldwide.FlowBank was put on FINMA’s watchlist a year after launching

The Swiss financial regulator first took enforcement action against FlowBank in October 2021, when it “identified serious breaches of supervisory law,” specifically with regard to capital requirements.

An independent auditor was appointed 12 months later to monitor FlowBank’s path back toward compliance.

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FINMA appointed another supervisor to monitor FlowBank’s financial activities and further investigate its compliance failures in June 2023 when more issues arose.

That investigation notably found “numerous higher-risk business relationships” and processed large transactions without doing proper due diligence, FINMA said.

FINMA ordered the withdrawal of the bank’s license on March 8, 2024. However the ruling hasn’t taken legal effect yet as it is pending an appeal at the Federal Administrative Court.

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