Swiss Regulator Shuts Down FlowBank Over Crypto Links
FlowBank, an online Swiss bank that allowed customers to invest in cryptocurrencies, has been closed and declared bankrupt by Switzerland’s financial regulator. The Swiss Financial Market Supervisory Authority (FINMA) made the announcement on Thursday, stating that FlowBank did not have enough capital to continue operating as a bank. They also mentioned that the bank had failed to meet minimum capital requirements, and there were concerns about its current level of debt with no possibility of restructuring.
In a message to customers on FlowBank’s website, the bank revealed that FINMA’s decision to close it down was made the previous day. Walder Wyss, a prominent Swiss law firm, has been appointed by FINMA to oversee the liquidation process for the bank.
Established in 2020, FlowBank had strong connections to the cryptocurrency industry, including being partially owned by CoinShares, a crypto asset manager. CoinShares acquired a 9% stake in the bank for $11.8 million in 2021, after which FlowBank started offering customers the option to trade and hold cryptocurrencies and other tokenized assets through their accounts.
Reports earlier this year indicated that Binance, the world’s largest cryptocurrency exchange, would enable larger traders to store their digital assets at FlowBank or Sygnum, another crypto-friendly Swiss bank.
According to information on FINMA’s website, customers of FlowBank with deposits of up to 100,000 Swiss francs (around $111,710) are protected and will receive their funds back within seven working days. However, the fate of customers’ cryptocurrency holdings remains uncertain. FINMA stated that the liquidator will determine whether the cryptocurrencies are considered custody assets to be treated like securities in the bankruptcy proceedings, or if they will be viewed as claims against the bank.
Despite attempts to contact FlowBank, the bank has not responded. The bank’s website now directs visitors to the letter informing clients of the closure, and its Twitter account has been deactivated. The future of FlowBank’s customers and their cryptocurrency investments now hangs in the balance as the liquidation process unfolds.