Swiss Regulator Shutters Crypto-Linked FlowBank, Begins Bankruptcy Process

FlowBank, an online Swiss bank that offered customers exposure to crypto, has been shut down and put into bankruptcy by Switzerland’s financial regulator.
The Swiss Financial Market Supervisory Authority (FINMA) announced its decision to shutter FlowBank on Thursday, saying the lender “no longer had sufficient capital for its operations as a bank” and that minimum capital requirements had been “significantly and seriously breached.” FINMA also said that there are “well-founded concerns that the bank is currently over-indebted,” with “no prospect” of a restructuring.
In a letter to customers posted on FlowBank’s website, the bank said FINMA’s decision to shut it down had been made yesterday. Walder Wyss, a top Swiss law firm, has been appointed by FINMA to serve as bankruptcy liquidators for the bank.
FlowBank launched in 2020 and had extensive crypto ties, including partial ownership by crypto asset manager CoinShares which, in 2021, purchased a 9% stake in the bank for $11.8 million. After CoinShares’ investment, the bank began offering its customers the ability to buy, sell and hold crypto and other tokenized assets directly from their FlowBank accounts.
Earlier this year, it was reported that Binance, the world’s largest crypto exchange, would allow larger traders to hold their crypto assets at FlowBank or Sygnum, another crypto-friendly Swiss bank.
According to a document posted on FINMA’s website, FlowBank customers with up to 100,000 Swiss francs (approximately $111,710) in deposits are considered protected, and will receive their money back within seven working days.
The future of customers’ crypto deposits, however, is less clear. FINMA has said that it is up to the liquidator whether the cryptocurrencies are classified as custody assets that will be treated like securities in the bankruptcy process, or whether they will be treated as “claims on the bank.”
FlowBank could not be reached for comment. All webpages for the bank route to the letter informing clients about the bank’s shutdown. The bank’s Twitter account has been deactivated.
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Cheyenne Ligon is a CoinDesk news reporter with a focus on crypto regulation and policy. She has no significant crypto holdings.