The Liechtenstein Financial Market Authority (FMA) has reportedly suspended an alleged request to appoint Binpen CEO Changpeng Zhao as a major shareholder in a troubled local bank.
As the Swiss financial news agency Inside Paradeplatz reported on August 10, the FMA rejected the alleged request and also refused to agree to an extension for more expert opinion that could be used to salvage the rumored deal.
It was reported that business attorney Wolfram Kony, who was based in Zurich in November 2019, contacted shareholders of Union AG and claimed:
“FMA is likely to accept Binance as a shareholder. In light of the fact that [Union Bank] is not currently falling behind [FMA] regulation regarding private funds, FMA clarified that Binance will apply for approval as a shareholder and an amount of 15 million Swiss francs (US dollars). 15.17 million) trust account for a capital increase later until the end of November.
In particular, Bank Al Etihad faced serious financial and legal difficulties. One of the first reported backers, Ukrainian businessman Konstantin Zhivago, has been on the international wanted list on suspicion of fraud and money laundering since December 2019.
Kuomi was looking for new shareholders to save the institute’s future, and was allegedly hoping to restart Union Bank AG as a platform for crypto clients.
In a private correspondence with Cointelegraph, a Binance representative wrote, “Binance did not try to get CZ (Changpeng Zhao) on the board.”
The representative added, “Binance has not been rejected by the Liechtenstein Financial Marketing Authority (FMA) as reported by Bank Al Etihad’s” request to win Binance as a major shareholder “.
Binance Chief Financial Officer Wei Zhou had previously flatly rejected the Stock Exchange’s request to become a shareholder, claiming it was inaccurate.
An official statement issued yesterday by Union Bank AG stated that at a general meeting on August 7th, “Union Bank AG’s shareholders decided to voluntarily liquidate the bank.”
The reason for the liquidation was the failure of the bank to meet the capital requirements of the European Capital Adequacy Regulation.
According to the statement, the bank did not meet these requirements because no shareholder was found who could bring in the necessary funds and would be acceptable to the FMA:
“In the past few months, the Board of Directors has extensively examined several options that would have made it possible to continue operating banking activities under the supervision of a new major shareholder and significantly higher capital base. The renewal of the shareholder group was not possible, despite negotiations. Extensive with stakeholders, some of which also underwent the regulatory approval process.
In response to previous reports about the alleged deal, Binance’s CFO said at the time that the exchange was open to considering a partnership with Bank Al Etihad and its new investors. Binance is committed to adding secure and reliable digital channels to help drive the adoption of cryptography around the world. ”
Today’s comment from Binance appears to maintain a solid line between any rumored initiative to win CZ as a major shareholder and the exchange itself.
In a Paradeplatz report today, she described the alleged deal attempt with CZ as “last remaining chance” for Cooney to save the bank.
The deal allegedly faced major regulatory setbacks as CZ reportedly sought to raise funds by converting its holdings of illiquid cryptocurrencies into Swiss francs through a complex process that involved creating a new entity called the CL1 Foundation.
The FMA decision to reject the alleged application was reached with the conclusion that five of the five criteria for serious management of the bank had not been met.
In response to Cointelegraph’s request for a statement, the FMA responded that it had not provided any comments on the individual cases under its supervision. The regulator has highlighted several criteria it uses to evaluate potential contributors under European regulations.
This includes the reliability of all persons who occupy management positions during the acquisition process; The financial health of the person in question with the acquisition in relation to the current and future operations of the bank; Assess whether there is a legitimate suspicion that the acquisition increases money laundering or terrorist financing risks.