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FlowBank bankruptcy - everything customers need to know now

Updated: Jun 26

FINMA is sending FlowBank into bankruptcy, leaving many questions unanswered. What does the bankruptcy mean for you as a customer, what do you have to do now and what happens next? We answer the most important questions about the FlowBank bankruptcy.

Flow Bank bankruptcy: All questions and answers
Flowbank bankruptcy

Everything you need to know about FlowBank bankruptcy at a glance

  • Bankruptcy announcement: FINMA opened bankruptcy proceedings against FlowBank SA on 13 June 2024 because the bank no longer has sufficient equity and is overindebted.

  • Course of the proceedings: The law firm Walder Wyss AG in Geneva was appointed as bankruptcy liquidator and will contact all creditors and draw up a list of claims.

  • Customer measures: Customers do not have to register their claims if their credit balances can be seen from the bank books. Other claims must be reported in writing.

  • Cash balances: Cash balances up to CHF 100,000 are given preferential treatment and should be paid out quickly. Cash balances over CHF 100,000 are assigned to the third bankruptcy class and are only paid out if sufficient assets are available.

  • Securities: Securities belong to the customer and are not included in the bankruptcy estate. Customers must indicate to which bank the securities are to be transferred.

  • Crypto assets: The treatment of crypto assets depends on the product in question. Safe custody account assets are transferred, while other investments could fall into the bankruptcy estate.

  • Recommendations: The "Become Wealthy" platform recommends Swissquote as an alternative online bank. With the voucher code MKT_BECOMEWEALTHY, you receive a trading credit of CHF 200 when you open an account.

  • Contact: Questions about the bankruptcy proceedings can be directed to the law firm Walder Wyss AG by e-mail at project-liquidateurfb@walderwyss.com.


What happened to FlowBank?

The Swiss Financial Market Supervisory Authority FINMA opened bankruptcy proceedings against FlowBank SA on 13 June 2024. In FINMA's view, this measure was necessary because the bank no longer has sufficient equity and there are therefore concerns that the bank is overindebted. FINMA had already opened proceedings against FlowBank in October 2021 due to a breach of supervisory duties. Comprehensive measures were ordered in October 2022, but FlowBank failed to comply with them. FINMA has now established that FlowBank's financial situation is far worse than it had previously reported to FINMA. For this reason, FINMA has now intervened to protect customers.


Below you can find out what consequences this has for you as a FlowBank customer and whether you will get your credit balances and assets back.


What happens now?

No more transactions are possible with immediate effect. The bankruptcy liquidator - the law firm Walder Wyss AG, Geneva branch - is now contacting all creditors and drawing up a list of claims. At the same time, the bank's assets are being realised in order to pay out the creditors.


Creditors must register their claims by stating the amount and the reason for their claims in writing. For customers whose credit balances can be seen in the bank books, this registration is automatically deemed to have taken place. As a FlowBank customer, you therefore do not need to take any action for the time being. If you have other claims against FlowBank, you must register your claim with the bankruptcy liquidator.


How do I get my money and securities back?

What happens to my cash assets?

Cash balances of up to 100,000 Swiss francs will be prioritised and should be paid out as quickly as possible. The bankruptcy liquidator will contact all clients shortly to find out to which account the amount should be transferred. These funds will be paid from FlowBank's remaining available assets. According to the latest information, there is no need to utilise the deposit guarantee scheme.

Swiss deposit insurance: Graphic shows the protection of bank deposits up to CHF 100,000 with a pink bar and a closed lock. The grey area above with an open lock shows the unsecured deposit
Swiss deposit insurance | Source: Become Wealthy

Cash balances in excess of CHF 100,000 are not treated as privileged. These credit balances are assigned to the third bankruptcy class and are paid out in part or in full after the schedule of claims has been drawn up, depending on the available assets. Cash balances of over CHF 100,000 will therefore only be returned if there are still enough assets to pay all creditors. Deposit protection does not apply, as only balances up to CHF 100,000 are protected.


What happens to my securities?

Securities are not part of the bankruptcy estate, they belong to you and not to FlowBank. The securities will be transferred back to the respective owners. The bankruptcy liquidator will contact you to find out which bank your securities should be transferred to. As FlowBank has 22,000 customers, the transfer may take several weeks.


What happens to crypto assets?

If you have held crypto assets with FlowBank, it depends on the product in question. If these are custody account assets that can be segregated and transferred like securities, the assets will be transferred to another bank. If, on the other hand, the investment must be regarded as a claim against FlowBank, the claim falls into the bankruptcy estate and it may not be possible to service it at all or only on a pro rata basis. The liquidator must decide this on a case-by-case basis. Longer processing times are therefore to be expected here too.


What do I have to do now?

If you are a FlowBank customer, you do not need to do anything for the time being. The law firm Walder Wyss, which has been appointed as the bankruptcy liquidator, will contact you and inform you about the next steps. It has been announced that cash balances of up to CHF 100,000 will be refunded quickly. If you held cash balances of over CHF 100,000 with FlowBank, you will have to be patient and hope that your claim can be fully or at least partially covered after the realisation of all FlowBank assets.


It will probably take a few weeks to transfer the securities to another custodian bank. The bankruptcy liquidator will inform you about the next steps. You will have to inform the bankruptcy liquidator to which bank your securities are to be transferred. You can therefore already start thinking about where your securities should be transferred to.


Which bank can Become Wealthy recommend?

If you want to use an online bank again, we can recommend Swissquote. Swissquote is the market leader in online banking. Swissquote has grown as an online broker with which you can trade the entire product range of financial products such as shares, ETFs, funds, derivatives, options, futures and cryptocurrencies via app or computer. Over the years, Swissquote has developed into a fully-fledged bank and, in addition to trading, also offers traditional banking services such as mortgages, automated asset management, pillar 3a and an account with a debit card and the usual payment options (Apple Pay, Samsung Pay, Google Pay, Twint, eBill). The areas of trading, investing and banking are thus fully covered by Swissquote.


With the Swissquote voucher code MKT_BECOMEWEALTHY, you will also receive a trading credit of CHF 200 when you open an account until the end of July, which you can use to make your first purchases.


Who should I contact if I have any questions?

Questions regarding the bankruptcy proceedings can be addressed to the law firm Walder Wyss AG. It can be contacted by e-mail at project-liquidateurfb@walderwyss.com.


 

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