Swiss Online Bank FlowBank Shut Down and Files for Bankruptcy

According to PANews, FlowBank, a Swiss online bank that provides cryptocurrency services to its customers, has been shut down by the Swiss financial regulatory authority and has filed for bankruptcy. The Swiss Financial Market Supervisory Authority (FINMA) announced the decision to close FlowBank on Thursday, stating that the bank 'no longer has sufficient capital to maintain its banking business' and that the minimum capital requirement has been 'seriously violated'. FINMA also stated that 'there is sufficient reason to worry that the bank is currently over-indebted' and that 'there is no prospect of restructuring'. FlowBank announced the decision to close the bank made by FINMA yesterday in a letter to its customers posted on its website. Swiss law firm Walder Wyss has been appointed by FINMA as the bankruptcy liquidator for the bank. According to documents posted on the FINMA website, FlowBank customers with deposits of up to 100,000 Swiss francs (approximately $111,710) will be considered protected and will receive refunds within seven working days. However, the future of customers' crypto deposits is still unclear. FINMA stated that whether cryptocurrencies are classified as custodial assets and considered securities in the bankruptcy process, or whether they are considered 'claims against the bank', depends on the liquidator. FlowBank was established in 2020 and has extensive connections with cryptocurrencies, including partial ownership by cryptocurrency asset management company CoinShares, which acquired 9% of the bank's shares in 2021 for $11.8 million. After CoinShares' investment, the bank began to provide customers with the function of directly purchasing, selling, and holding cryptocurrencies and other tokenized assets from their FlowBank accounts.