The rumors spread on Friday after the Swiss financial news outlet Inside Paradeplatz reported Binance had signed a commitment to acquire the bank. According to the news report, representatives of Union Bank AG, Binance, and the Financial Market Authority (FMA) of Liechtenstein met and signed an agreement.
The report also quoted a letter from Zurich-based lawyer Wolfram Kuoni – the President of Union Bank – to the bank’s shareholders, claiming that, “The FMA is likely to accept Binance as a shareholder.”
“However, given that (Union Bank) as of now in default of the (FMA) order regarding own funds, FMA has made it clear that Binance must file to application for approval as shareholder and pay in amount of CHF 15 million [$15.17 million] to escrow account for a later capital increase by the end of November,” continued the letter.
Is Binance exploring options to incorporate in Liechtenstein?
In the meantime, Binance has officially denied these media reports. Binance CFO, Wei Zhou, said, “The reports that Binance is investing in Liechtenstein-based Union Bank or has applied with the Financial Market Authority to become a shareholder of the bank are inaccurate.”
However, Zhou also said Binance, “would be open to exploring a partnership with Union Bank and its new investors. Binance is committed to adding safe and reliable fiat channels to drive crypto adoption around the world.”
There have also been rumors lately that Binance might be looking to give up its base in Malta and is exploring other options. After several cryptocurrency firms have left Malta over the past months – including crypto exchange Bittrex, which has moved to Liechtenstein – it’s not unlikely Binance is looking for options as well. The firm’s interest in Union Bank AG could be a hint that Binance is considering Liechtenstein as an alternative.
Bittrex has recently been actively acquiring companies relevant to its business model. Just earlier last week, the company bought Beijing-based blockchain data startup DappReview, which was the exchange’s fourth publicly announced acquisition. During the past two years, Binance has acquired Indian cryptocurrency exchange WazirX, Seychelles-based derivatives platform JEX – which ist now Binance JEX – and U.S.-based mobile wallet company Trust Wallet.
Union bank’s former shareholders involved in international lawsuits
Vaduz-based Union Bank AG is urgently in need of new investors, as the FMA has set the bank a deadline to find new financial backers. Otherwise, the FMA is likely to withdraw the banking license of the bank, forcing it to go for liquidation.
The reason why the bank needs new backers is that two of its current investors are tied up in international law-suits involving money-laundering cases. Thus, the FMA has ordered the bank to find new investors.
Earlier this year, then majority investor Mohammad Dastmaltchi had to step back from the bank’s board and sell his shares, after his involvement in a money laundering case.
Several months later, the Ukrainian billionaire Kostyantin Zhevago, who owns 21.2% of the bank, was put on an international wanted list for embezzlement and money-laundering. The Ukrainian government is chasing Zhevago, accusing him of having illegally transferred large sums of money out of the country.
Union Bank has neither commented on Zhevago’s case nor the rumors involving Binance.