The Swiss financial regulator FINMA announced the bankruptcy of the crypto bank FlowBank, citing a lack of reserves and the inability of the company's management to comply with the necessary requirements on time.
History of problems
Initial action against FlowBank was taken in 2021, when FINMA identified serious violations in capital management and business processes. In subsequent years, additional problems with financial accounting and insufficient capital were identified, resulting in multiple compliance violations.
In March 2024, FINMA revoked FlowBank's license, noting long-term non-compliance with licensing conditions. FlowBank is challenging this decision by appealing to the Federal Administrative Court of Appeal.
Impact on the market
Crypto bank FlowBank has engaged in large transactions, including high-risk agreements, that could impact its clients and partners, including the largest crypto exchange Binance.
While FlowBank fell victim to bankruptcy, other financial institutions such as Dukascopy Bank continue to develop their activities, including cryptocurrency exchange services, under the FINMA license.
This case was another reminder of the importance of strict compliance with regulatory standards in the field of crypto banks in Switzerland and around the world.