A recent report from Inside Paradeplatz reveals that the Liechtenstein Financial Supervisory Authority has rejected Binance’s attempts to acquire a stake in Union Bank AG (UBAG), which has been on the verge of liquidation since 2019.
The rumors further spread today after the cryptocurrency exchange denied all such media reports, which also claimed that the banking regulator has denied UBAG request to install CEO Changpeng Zhao as a major shareholder in the bankrupt bank.
The Swiss news outfit revealed further interesting details about the failed offer including that Zhao wanted to carry out the transaction by converting his cryptocurrency holdings into francs through an entity called CL1 Foundation. Rumors suggest that the Chinese entrepreneur might have to pay as much as 15 million CHF to close the bailout deal.
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While the country’s financial regulation, the FMA, was initially positive towards the offer when it surfaced in December, Binance was obliged to file for approval with the regulator and make payment to an escrow account.
According to an extract from Paradeplatz’s report, the FMA not only blocked Binance’s bid but also saw no reason to extend the deadline for a further expert opinion. This could still save the deal for the Liechtenstein-based financial institution with the world’s largest crypto exchange.
The rejected offer from Binance would have saved the bank from closure after recent financial and legal troubles, including an ongoing corruption case involving two of its majority backers. Konstantin Shevago, a Ukraine investor, and another unidentified Iranian shareholder were tied up in international law-suits involving money-laundering cases, leaving UBAG in a desperate search for new investors.
Vaduz-based Union Bank AG was planning to launch a crypto banking platform and touted itself as the first fully regulated bank ever to issue its own security tokens. But following the FMA’s rejection, it lost its banking license and went into liquidation on August 8, according to a statement published on its website.