FlowBank, a Swiss financial institution that has traditionally been pleasant to crypto companies, has been pressured into chapter 11 by FINMA, the Swiss Monetary Market Supervisory Authority.
The press launch issued by FINMA claims that FlowBank “no longer has sufficient capital for its operations as a bank” and additional claims that it’s apprehensive that the financial institution is “over-indebted.”
Moreover, the regulators are involved that the “bank entered into numerous higher-risk business relationships and processed large transactions without properly investigating.”
FINMA beforehand ordered the financial institution’s license to be withdrawn, however that ruling has been held up throughout enchantment.
The press launch additionally notes that it intends to “repay deposits up to CHF 100,000” out of the financial institution’s remaining belongings.
TrueUSD
Among the many companies that FlowBank was concerned in was TrueUSD, a controversial stablecoin with hyperlinks to crypto entrepreneur Justin Solar.
Solar has admitted he was a accomplice market maker for this stablecoin, however others have alleged that he owns or no less than tried to buy it.
TrueUSD used to reveal that FlowBank was the place it saved a good portion of its belongings however ultimately stopped these disclosures. As of in the present day, its attestations nonetheless describe a ‘Swiss Depository Institution’ the place funds are held.
Learn extra: TrueUSD attestations paused once more, this time for improper ‘balances’
This attestation additionally offers us some perception into the roughly $503 million in belongings supposedly backing this stablecoin. The overwhelming majority of that is at present held at First Digital Belief in Hong Kong, with solely ~$1.1 million at present held on the different depository establishments.
Protos has reached out to TrueUSD to find out how this chapter will have an effect on its operations, however at time of publication, it has but to reply.
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