Binance CEO Richard Teng recently shared that the cryptocurrency exchange is closely monitoring the situation surrounding the bankruptcy of FlowBank. Despite the Swiss regulator’s announcement of FlowBank breaching its minimum capital requirements, Binance has stated that the impact on its customers is minimal, with “very little” assets being held at FlowBank.
FlowBank, established in 2020, quickly gained popularity among crypto businesses and partnered with Binance to provide a secure location for clients to store their trading collateral. The bank also had connections to TrueUSD stablecoin and CoinShares, a crypto asset manager. TrueUSD announced that it closed its bank account at FlowBank in April 2024 and has no financial exposure to the bankrupt entity.
Similarly, CoinShares revealed that its exposure to FlowBank as a customer is insignificant, with deposits totaling around £100,000. Additionally, CoinShares holds nearly 30% of FlowBank’s shares as of March 2022. Reports from May 2023 indicated that Binance was exploring options for institutional clients to store their trading collateral at a bank to mitigate counterparty risk post the collapse of FTX. While it is uncertain if FlowBank was selected for this purpose, Binance continues to work closely with its customers to address any concerns related to the bankruptcy.
Overall, despite the challenges faced by FlowBank, Binance remains committed to ensuring the security and protection of its clients’ assets. The exchange’s proactive approach in addressing the situation reflects its dedication to maintaining trust and transparency within the crypto community. As the industry continues to evolve, collaborations between exchanges and financial institutions will play a crucial role in enhancing the overall stability and reliability of the cryptocurrency market.