Anchored Coins stopped accepting customers and the stablecoin paused withdrawals. The Swiss stablecoin issuer is one of the affected customers of the bankrupt FlowBank SA.AEUR stablecoin owners.
The Ongoing collapse The $781 million Swiss bank FlowBank is making waves across the crypto industry and threatening the stablecoin's existence.
This is because Anchored Coins AG, the Swiss company that issues the euro-pegged stablecoin AEUR, has deposited part of the reserve backing for it. $63 million Euro stablecoin in troubled bank.
Anchored Coins did not immediately respond to a request for comment.
According to A, the company has paused its token issuance and withdrawal until further notice Advertisement on its website. The company has also stopped accepting new customers.
“As the bankruptcy process for FlowBank SA in liquidation is still at an early stage, it is not yet clear to what extent this portion of our collateral can be recovered,” Anchored Coins said. “Therefore, in the event of a deficit, 1:1 redeemability cannot be justified, leading to a corresponding loss for holders of AEUR tokens.”
“In accordance with Swiss law, such damage will be applied proportionately to all AEUR token holders,” the company said.
AEUR is reimbursing customers
If Anchored Coins defaults on its obligation to redeem users' tokens for fiat, those deposits serve as a fallback redemption guarantee for its stablecoin holders.
With FlowBank in liquidation, those funds will remain dormant until Swiss authorities appoint a liquidator to oversee the return of deposits to creditors — a process that could take time.
Join the community to get our latest articles and updates
Anchored AG is not guaranteed to recover all deposits in the affected bank, meaning stablecoin holders could take a haircut on their holdings.
FlowBank's bankruptcy isn't the only recent crisis that stablecoin issuers have faced.
Binance paused AEUR trading in December, four days after its initial listing on the exchange saw the token rise 200% to $3.25 – an unusual occurrence for a stablecoin. Crypto exchange Attributed to The token's upward dip pegs to factors including “users not realizing its status as a stablecoin.”
Osato Awan-Nomayo Our Nigeria based DeFi representative. He covers DeFi and technology. To share tips or information about articles, please contact him here [email protected].
Related TopicsSTABLECOIN