Swiss Financial Watchdog FINMA Opens Bankruptcy Proceedings Against Challenger Bank FlowBank

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The Financial Market Supervisory Authority (FINMA), the regulatory authority of Switzerland, recently opened bankruptcy proceedings against FlowBank — a challenger bank in the investment banking space. According to the regulator, FlowBank saw serious, repeated breaches of its capital requirements.

FINMA Has Long Suspected FlowBank Of Regulatory Breaches

FlowBank is one of many challenger banks competing for their market share. It offers online brokerage and trading, and its main office is located in Geneva. However, the bank also has two subsidiaries, one in the Bahamas and another one in London.

In total, the bank managed to accumulate more than 22,000 client accounts, and it currently has around 140 employees around the world.

However, according to FINMA, the wind-up proceedings have been taken to protect depositors. The regulator has been monitoring the bank, and it has reason to believe that it might be over-indebted.

Initially, FINMA made its first enforcement action against FlowBank in October 2021. At the time, the regulator identified breaches of supervisory law, particularly regarding capital requirements. This is a requirement for all adequate organizations and risk management.

About a year later, in October 2022, the regulator ordered wide-ranging measures to restore the bank’s compliance with the law. It also appointed a third-party auditor to monitor the implementation of these measures.

However, the problems were not resolved. Quite the opposite in fact, they kept mounting, and FINMA was forced to install an independent monitor to oversee the bank’s activities and investigate where exactly is the issue and why there have been numerous compliance failures.

Eventually, the monitor reported that FlowBank breached the capital requirements, and it did so repeatedly, even during the period when it was monitored.

The Investigation Found Numerous Problems

One of the first and harshest violations comes from the bank’s bookkeeping and financial reporting. The monitoring revealed that it is not only incomplete but also inaccurate. The bank failed to fulfill disclosure and reporting obligations to FINMA, as dictated by local regulations

Furthermore, the investigation also found that FlowBank entered into several higher-risk business relationships and processed massive transactions for these businesses without running AML checks properly.

With this being the case, FINMA decided to order the withdrawal of the bank’s license earlier this year, in March. Instead, it started insolvency proceedings after FlowBank published its 2023 financial statement, which indicated that it was in breach of the minimum capital requirements at the end of last year and once again in April 2024.

FINMA turned to Walder Wyss AG, a local law firm, which is to act as a liquidator and carry out bankruptcy proceedings. During the first step, the liquidator is to repay deposits of up to CHF 100,000 to FlowBank’s clients.

However, calculations also show that the privileged deposits can be fully repaid using the bank’s own available funds.


Ali is a professional journalist with experience in Web3 journalism and marketing. Ali holds a Master's degree in Finance and enjoys writing about cryptocurrencies and fintech. Ali’s work has been published on a number of leading cryptocurrency publications including, CryptoSlate,,, Business2Community, BeinCrypto, and more.