Swiss Crypto Bank Collapses: Is Your Money at Risk After FlowBank’s Shutdown?

Swiss Crypto Bank Collapses: Is Your Money at Risk After FlowBank’s Shutdown?

Share and Get Popular🚀

Quick Take:

  • Swiss regulator FINMA shuts down FlowBank citing severe financial instability with no hope for restructuring.
  • Clients with Swiss accounts can breathe a slight sigh of relief, eligible for reimbursement up to CHF 100,000.

Yello Paradisers! Could your crypto investments be jeopardized as Switzerland’s FlowBank is forced into bankruptcy amid severe financial mismanagement claims?

Swiss Crypto-Friendly Bank Faces Curtains

In a surprising twist that might make a Swiss watch’s punctuality look questionable, the Geneva-based FlowBank has found itself in hot water. The Swiss Financial Market Supervisory Authority (FINMA) has pulled the plug on this crypto-friendly banker, citing a serious breach in banking standards. Specifically, the bank’s capital has dipped below the safety line for its banking operations, leading FINMA to declare it over-indebted with no silver lining of restructuring in sight.

Deposits and Disappointments

For FlowBank’s clients, there’s a glimmer of hope despite the grim news. Those with cash deposits in Swiss accounts under their names might not have to kiss their funds goodbye just yet. They are eligible for a reimbursement cap of CHF 100,000 per client. Terms for these reimbursements are being ironed out and will be communicated soon, a small consolation in a sea of financial chaos.

Legal Eagles Take Flight

With legal intricacies to navigate, FINMA has appointed Walder Wyss, a top Swiss law firm known for navigating through tumultuous legal waters, as the bankruptcy liquidators. They’re tasked with the not-so-enviable job of tidying up the financial mess.

Crypto and Caution

Launched in 2020, FlowBank had not just dipped its toes but dived headfirst into the crypto trading world and had been the banking partner for Techteryx, the issuer behind the stablecoin TrueUSD (TUSD). Despite managing assets worth CHF 680 million and handling 22,000 clients, the bank’s foray into financial innovation couldn’t shield it from regulatory scrutiny. FINMA has been vocal about the risks associated with digital assets, emphasizing their potential to complicate issues like money laundering and terrorism financing due to their anonymity and global nature.

A Regulatory Ripple

This isn’t the first time FlowBank felt the regulator’s glare. Back in October 2021, FINMA had already flagged the bank for “serious breaches of supervisory law,” particularly concerning its capital requirements. It seems the financial woes were a ticking time bomb that finally went off, sending ripples across the crypto banking sector in Switzerland. The closure is a stark reminder of the tightrope walk between innovation and regulation.

Notify of

Inline Feedbacks
View all comments

Recent Articles

Follow Us

Trade Crypto Like a PRO

Decrease the risk of losing everything you have.

A team of 4 professional traders is sharing their personal daily trade setups with you.

Imagine finally having the right strategy, insights and knowledge to profit from the volatile crypto market movements consistently.

Safe Time, and Start Trading Like a PRO Today
Dark Mode