FNG has learned that Swiss online neobank / neobroker FlowBank is no longer processing any new client applications, and has halted client onboarding, after Swiss financial regulator FINMA’s decision to begin bankruptcy proceedings against FlowBank, a story which FNG broke earlier today.
While FlowBank’s main website (at flowbank.com) remains up, its “Open an Account” page now carries the following “Under maintenance” message:
Under maintenance
In our efforts to continuously improve our platforms, we are currently under maintenance. At this time the FlowBank onboarding will be unavailable. If you wish to open your account during this period, please contact Customer Support at support@flowbank.com or by phone at +41 (0) 22 888 61 00.
Thank you for your patience and don’t hesitate to reach out to us if you have any questions.
FlowBank was established in 2020 by CEO Charles-Henri Sabet, who previously ran London based online broker London Capital Group Ltd (or “LCG”). Crypto investments company CoinShares owns an approximate 30% equity interest in FlowBank. While the company’s initial mandate was to focus on banking and investment activities, more recently the company reverted to its “LCG roots” and has been mainly promoting online CFD trading, as is clearly evident from its website home page (see below).
In a statement made this morning, Swiss regulator FINMA said that FlowBank no longer has the minimum capital required for its business operations, with fears that the bank is over-indebted. The company was therefore placed into bankruptcy, in order to protect depositors. FINMA’s initial calculations show that FlowBank’s “privileged deposits” can be repaid in full out of the bank’s available funds.
It is unclear at this stage if the FlowBank bankruptcy will at all affect the operations of LCG, which is a subsidiary of FlowBank SA (based on the latest information available, in FlowBank’s 2021 Annual Report). London Capital Group Ltd is separately licensed by the UK’s FCA, and appears to be in good standing, except that the company appears to be nearly six months overdue in filings its 2022 financial accounts. The group also owns London Capital Group (Cyprus) Ltd, which had its CySEC license withdrawn in 2021, and an offshore entity in the Bahamas, LCG Capital Markets Limited.
FlowBank’s (apparent) demise marks the second promising neobroker in Europe to go away, following the sale late last year of Amsterdam based BUX to ABN Amro, for an undisclosed sum, following continued losses at BUX.
We will continue to follow this story as it develops.
