Reports from a Swiss news outlet, Inside Paradeplatz, stated that the Liechtenstein Financial Market Authority, FMA, had rejected the Binance exchange application to take over the reigns at Union Bank as a major shareholder. The report further states, Binance CEO, Changpeng “CZ” Zhao application to sit at the bank’s Board of Directors was also swiftly rejected in a ruling released on July 10th.

However, the world’s largest crypto exchange came out strongly at the start of the week to quash those claims stating they’ve never made an application to the FMA. In a Telegram message first reported by CoinDesk, a spokesperson from the firm said,

“Binance did not try to invest, and did not try to put CZ on the board.”

Union Bank declared bankruptcy after a long battle with the authorities and multiple attempts to save the bank were fruitless. Notwithstanding, two of the banks' early founders, Ukrainian-runaway investor, Konstantyn Zhevago, and another unidentified Iranian shareholder have been on the Interpol most wanted criminals list since the end of 2019 due to money laundering charges.

At the end of 2019, one of the insiders reportedly told Union Bank AG’s shareholders Binance was at the cusp of acquiring a major stake in the bank to save it from crumbling. The reports stated Binance had to pay about 15 million CHF (~$15.7 million) as well as file its approval to become a shareholder with the FMA. The Swiss news outlet reports further claims CZ was ready to convert his crypto to raise the amount needed through a newly created CL1 Foundation.

Binance denied these allegations earlier when the rumors first came about.

This represents the last opportunity for the bank to find new investors to save it from collapse as the FMA also denied any expert advice on Binance taking over the distressed bank.

The Vaduz-based bank held a shareholders meeting on Aug 7th to discuss the future of the bank following Binance’s and CZ’s crushed advances. In a statement by the bank, the shareholders decided to liquidate the bank as they could not meet the capital adequacy requirements of the European Capital Adequacy Ordinance (CRR) implemented on 1 January 2020.

While not mentioning any specific investor, the bank stated the Board of Director's search for acceptable investors was cut short by FMA rejections, hence the reason for non-attainment of the CRR. The statement reads,

“The reason for the non-attainment of the capital adequacy requirements was that no shareholder acceptable to the FMA could be found who would have contributed the necessary funds.”

No further comments were provided by FMA and the Union Bank AG. Customers’ deposits remain secure.

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