FlowBank Liquidators Urge Clients to Sell Securities for Faster Refunds

Walder Wyss, the Swiss law firm overseeing the liquidation of bankrupt neobank FlowBank, has encouraged former clients to sell their securities held in accounts to expedite the refund process. Clients are able to log in to the FlowBank platform and complete the sale of their securities until 15th November 2024, after which the platform will no longer facilitate such transactions. This initiative aims to simplify the refund procedure and provide quicker access to funds, with the sale of assets seen as more efficient than transferring securities directly to clients.

The liquidators emphasized that direct transfer of securities to clients would involve significant time and cost. In contrast, converting securities to cash is a faster and simpler method, allowing for smoother disbursement of funds. Clients who opt for the sale can expect their refunds to be processed in a timely manner, while those who do not may face additional delays in receiving their assets.

Once a client‘s positions are sold, the resulting cash will be credited to a separate account before being transferred to a bank account designated by the client. The funds will be sent in either EUR or CHF, depending on the client's choice, and Walder Wyss indicated that these transfers will typically occur within a few days of the sale. However, during the first two weeks of the platform’s launch, manual or automated securities transfers will not be available, as the focus will be on completing sales.

FlowBanks downfall came after the Swiss financial regulator FINMA forced the company into bankruptcy in mid-June 2024. FINMA cited concerns that FlowBank had failed to maintain the minimum required capital for its business operations, with signs that the institution was over-indebted. Founded in 2020 by Charles-Henri Sabet, the company initially focused on providing banking and investment services before shifting its attention toward promoting online CFD trading, similar to Sabet's previous venture, London Capital Group (LCG).

FlowBank's minority owner, crypto investment company CoinShares, held a 30% stake in the neobank at the time of its collapse. While liquidation efforts continue, the liquidators are actively seeking a buyer for LCG, which remains a key unresolved aspect of the process.

This decisive move by Walder Wyss is seen as crucial for ensuring that FlowBanks clients can recover their assets without unnecessary delays, as the liquidation process progresses. Clients are advised to act promptly and take advantage of the streamlined solution to avoid prolonged waiting periods.