Binance CEO says customers have ‘very little’ assets in bankrupt FlowBank

Binance president Richard Teng said the exchange is in “close contact” with its customers regarding the bankruptcy of FlowBank, which stored the exchange’s customers’ trading collateral.

Cryptocurrency exchange Binance appears to be unaffected by FlowBank’s bankruptcy, after the Swiss regulator announced on June 13 that the bank had committed “substantial and serious breaches” of minimum capital requirements.

In an interview with Bloomberg, Binance CEO Richard Teng assured that the exchange was cooperating with its customers on the bankruptcy and noted that “very few” assets were held in FlowBank.

“There is very little presence in FlowBank on the tripartite regulatory front.”

Richard Teng

Launched in 2020, FlowBank has quickly become a friendly hub for crypto businesses. The exchange has partnered with Binance on an arrangement that allows its customers to keep their trading collateral at the bank rather than on the crypto platform. The Geneva-based bank also had ties to TrueUSD stablecoin and crypto asset manager CoinShares.

In an X post on June 14, TrueUSD stated that it closed its bank account with FlowBank in April of this year and had no affiliation with the bankrupt entity.

TUSD has closed its bank account with FlowBank since April 2024 and does not currently have any reserve exposure or banking relationship with FlowBank.

— TrueUSD (@tusdio) June 14, 2024

CoinShares said in a blog post that its exposure to the bank as a customer was “insignificant” and that deposits totaled around £100,000 (about $127,600). Additionally, CoinShares is an investor in FlowBank and holds approximately 30% of the bank’s shares as of March 2022.

In May 2023, reports emerged that Binance was in talks to allow some institutional clients to keep their trade collateral in a bank to reduce counterparty risk following the FTX collapse. It is not yet clear whether FlowBank was chosen for this purpose.