Binance CEO says customers have ‘very little’ assets in bankrupt FlowBank
Binance head Richard Teng says the exchange is in “close touch” with its customers regarding the bankruptcy of FlowBank, which stored the exchange’s clients trading collateral.
Cryptocurrency exchange Binance seems unaffected by FlowBank‘s bankruptcy, following the Swiss regulator’s announcement on Jun. 13 that the bank had “significantly and seriously breached” its minimum capital requirements.
In an interview with Bloomberg, Binance chief executive Richard Teng reassured that the exchange is cooperating with its customers regarding the bankruptcy, noting that “very little” assets were held at FlowBank.
“There’s very little assets on FlowBank on the tripartite arrangement front.”
Richard Teng
Launched in 2020, FlowBank quickly became a friendly hub for crypto businesses. It partnered with Binance in an arrangement allowing the exchange’s clients to keep their trading collateral at the bank rather than on the crypto platform. The Geneva-based bank also had ties to the TrueUSD stablecoin and crypto asset manager CoinShares.
In an X post on Jun. 14, TrueUSD noted it had closed its bank account at FlowBank in April this year, adding it has no exposure to the bankrupt entity.
CoinShares said in a blog post that its exposure to the bank as a customer is “immaterial,” with deposits totaling approximately £100,000 (around $127,600). Additionally, CoinShares is an investor in FlowBank, holding nearly 30% of the bank’s shares as of March 2022.
In May 2023, reports surfaced that Binance was in discussions to allow some institutional clients to keep their trading collateral at a bank to reduce counterparty risk following the collapse of FTX. It remains unclear whether FlowBank was chosen for this purpose.
