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Shock as Binance Partner, Bitcoin (BTC) Advocate Bank Faces Bankruptcy!
A surprising development has occurred as the Swiss financial regulator, the Financial Market Supervisory Authority (FINMA), has announced the bankruptcy and closure of FlowBank, a staunch supporter of Bitcoin (BTC) and other cryptocurrencies.
Author:
Elif Azra Güven
14.06.2024 – 10:14
Update:
5 seconds ago
0
The FINMA revealed that FlowBank’s financial troubles stemmed from inadequate capital and significant debts.
Following an investigation, the FINMA concluded that the bank had seriously breached its obligation to maintain sufficient capital and declared that the bank must be liquidated.
“On June 13, 2024, the Swiss Financial Market Supervisory Authority, FINMA, initiated bankruptcy proceedings against FlowBank SA.
This decision was necessary as the bank failed to meet the minimum capital requirements for its operations.
There are concerns that the bank may be heavily indebted.
The primary goal of the bankruptcy proceedings is to safeguard depositors. It is estimated that all privileged deposits can be repaid from the bank’s available funds.”
Uncertainty Surrounds Cryptocurrency Refunds!
The FINMA has indicated that refunds will be prioritized for customers with funds up to 100,000 Swiss francs ($111,710). However, the fate of customers’ cryptocurrency holdings remains uncertain.
The liquidator will determine whether cryptocurrencies will be considered as custody assets, treated as securities in the bankruptcy process, or classified as bank liabilities.
FlowBank, established in 2020, entered the cryptocurrency space after CoinShares acquired a 9% stake in the bank for $11.8 million in 2021.
Subsequent to CoinShares’ investment, the bank introduced the option for customers to buy, sell, and hold crypto and tokenized assets directly through their FlowBank accounts.
FlowBank also served as the banking partner for Bitcoin exchange Binance, offering custody services to select large investors who preferred not to keep their funds on the exchange.
*This article does not constitute investment advice.
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