Binance Planning to Invest in Bankrupt Union Bank: Report

Crypto exchange Binance is considering to invest in Vaduzer Union Bank, a bank in the capital city of Liechtenstein.

According to a report by Inside Paradeplatz on Friday, the Malta-registered exchange is in talks with Wolfram Kuoni, a well-known SVP commercial lawyer with a law firm in Zurich, to finalize the deal.

“Yesterday, we had a meeting with the Financial Market Authority (FMA) and the representatives of Binance, which operates a globally leading cryptocurrency exchange,” Kuoni said in a letter dated 19 November 2019 to the “shareholders” of Union Bank AG.

This came as the bank needs to find financial backers amid the deadline set by the Liechtenstein FMA.

A good deal?

The bank is tied to the Kostyantin Zhevago, the former chief executive of London-listed iron pellet producer Ferrexpo, whose name was put in an international wanted list for embezzlement and money-laundering in connection with the disappearance of UAH2.5 billion (around $104 million) from the now-bankrupt lender.

According to the lawyer, the deal will be accepted by the market regulator.

“The FMA is likely to accept Binance as a shareholder,” the publication quoted Kuoni.

However, there will be complications as the bank is already in “default.” Per FMA’s order, the crypto exchange needs to file an application for approval as a shareholder and pay an amount of CHF 15 million (almost $15.18 million) to escrow account for a later capital increase by the end of November.

If anything goes wrong in the deal, the FMA is likely to withdraw the banking license of the bank, forcing it to go for liquidation.

Meanwhile, Binance is on an acquisition spree and strengthened its position in the sector by acquiring several blockchain startups. Most recently, the exchange bought DappReview, an analytics platform for decentralized applications (DApps), for an undisclosed sum.

(Photo: Binance)

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