The Swiss Financial Market Supervisory Authority (FINMA) has ordered the closure of FlowBank, an online Swiss bank active in the crypto space, due to insolvency and inadequate capital. FINMA assured that deposits up to 100,000 Swiss francs are guaranteed, but the situation with crypto assets remains unclear.
This shutdown follows FlowBank’s severe violations of minimum capital requirements and high indebtedness. The bank’s website now redirects to a notice about the closure, and Walder Wyss, a Swiss law firm, has been appointed as the bankruptcy liquidator to manage the process.
Earlier this year, FlowBank’s partnership with Binance highlighted its prominent role in the crypto market. However, the closure disrupts such collaborations and raises concerns about the future of crypto-friendly banks. The uncertain status of crypto deposits, which may be treated as either custody assets or claims on the bank, adds to customer anxieties.
This event coincides with leadership changes at FINMA, with Stefan Walter set to become the new CEO in April 2024, potentially signaling a shift in regulatory approaches within Switzerland’s financial sector.
FlowBank’s closure underscores the critical need for robust financial regulations in the evolving crypto industry, impacting stakeholders and future partnerships.
