Swiss regulators close FlowBank, a digital bank that supported cryptocurrency operations – DiarioBitcoin

FINMA alleges that the bankruptcy of FlowBank It comes about due to serious violations of banking laws and requirements, in addition to possible over-indebtedness of the entity. Clients will be compensated as indicated by legal provisions.

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• FINMA closes operations FlowBank in Switzerland
• They allege serious violations of banking laws and requirements
• There were suspicions of over-indebtedness and lack of liquidity
• Clients will be compensated in accordance with current legal provisions
• The situation is somewhat reminiscent of what happened with several crypto-friendly banks in the US.

The Swiss online bank that offered its clients exposure to cryptocurrencies, FlowBank, It was closed and declared bankrupt by local regulators.

Close of FlowBank in Switzerland

This is indicated by a report published by the media CoinDesk, which indicates that the Swiss Financial Market Supervisory Authority (FINMA) announced today the closure of FlowBank. He alleged that the entity no longer had sufficient capital to operate as a banking entity, in addition to non-compliance “significant and serious” of the minimum required liquidity requirements, so there were suspicions of over-indebtedness without clear prospects for restructuring.

Due to the decision by FINMA, the organization appointed the legal firm Walder Wyss as liquidator of the bankruptcy process for FlowBank, Therefore, due process will now be followed and users will be compensated in accordance with current legal provisions.

Since clients were able to manage cryptocurrency deposits, the future of these funds is unclear under the laws. About, FINMA He indicated that it will depend on the liquidator how to classify these funds, so they must define whether they are assets in custody, securities or rights over the bank.

As such FlowBank It was a bank that had operated since 2020, which had very close ties with companies in the crypto sector such as CoinShares, which had 9% of its shares after an investment made in 2021. This connection allowed the company’s clients to buy, sell and exchange digital currencies from their account at the financial institution.

Regarding operations, Binance allowed large merchants to keep their cryptocurrencies both in FlowBank as Sygnum, both Swiss banks that offered exposure to these assets.

Cryptobanks affected

The cessation of operations of FlowBank It is reminiscent of what happened in 2023 with several US banks, which offered services to companies in the crypto sector and were closed for various reasons by local regulators.

Federal regulators seized Signature Bank on March 12, and two days before they did the same with Silicon Valley Bank (SVB), a 40-year-old California-based bank. The collapse of SVB, formerly one of the 20 largest banks in the US, represents the country’s biggest banking collapse since the 2008 crisis.

The closure of Signature Bank occurred shortly after Silvergate, another bank focused on digital currencies, announced the ceasing of operations and voluntary liquidation of its business. The FDIC took control of both banks’ deposits seized by regulators, SVB and Signature.

At that time, these measures were classified as an attack against crypto-friendly banks, although the situation revealed the beginning of an even more delicate banking crisis, which ended up affecting other entities outside the digital currency sector as a serious crisis became visible. of liquidity.

coming back with FlowBank, The closure measure became effective today, so both the website and the social media accounts were no longer active, sharing messages about the bankruptcy process.

WARNING: This is an informative article. DiarioBitcoin is a media outlet, it does not promote, endorse or recommend any particular investment. It is worth noting that investments in cryptoassets are not regulated in some countries. They may not be suitable for retail investors as the entire amount invested could be lost. Check the laws of your country before investing.