FlowBank, a Swiss online bank known for its crypto ties, has been closed down by the Swiss Financial Market Supervisory Authority (FINMA) due to insufficient capital and serious breaches of minimum capital requirements. This decision was announced on Thursday, with FINMA expressing concerns about the bank being over-indebted and lacking prospects for restructuring.
In a letter to customers on FlowBank’s website, the bank confirmed FINMA’s decision to shut it down. Walder Wyss, a prominent Swiss law firm, has been appointed as bankruptcy liquidators for the bank. FlowBank, which was established in 2020 and had strong connections to the crypto industry, saw partial ownership by CoinShares, a crypto asset manager that acquired a 9% stake in the bank for $11.8 million in 2021. Following this investment, FlowBank allowed customers to trade and hold crypto assets directly from their accounts.
Earlier reports indicated that Binance, the world’s largest crypto exchange, was permitting larger traders to store their assets at FlowBank or at Sygnum, another crypto-friendly Swiss bank. According to information on FINMA’s website, customers with deposits of up to 100,000 Swiss francs are protected and will receive their funds back within seven working days.
However, the fate of customers’ crypto deposits remains uncertain as FINMA has not clarified whether these assets will be treated as custody assets or as claims on the bank in the bankruptcy process. Despite attempts to reach out to FlowBank for comments, the bank’s webpages now only display the letter informing clients of the shutdown, and the bank’s Twitter account has been deactivated.