On March 4, 2025, the Swiss Financial Market Supervisory Authority (FINMA) initiated bankruptcy proceedings against a FinTech start-up known as SWISS4.0 SA. This action was taken due to concerns regarding the company’s substantial debt and serious liquidity challenges. As part of this process, FINMA has appointed a liquidator to oversee the bankruptcy.
The regulatory body had been monitoring the financial health of the start-up and had previously urged it to take necessary steps to rectify its precarious financial situation. Unfortunately, the measures proposed by the company and its management were insufficient and not executed within an acceptable timeframe.
SWISS4.0 SA operates as a micro-enterprise, with an estimated client base of around 250 individuals. The firm possessed a FinTech license that was designed to have relaxed supervisory requirements, allowing for the experimentation with innovative business models with lower barriers to entry. This regulatory framework aims to promote the emergence of new financial services; however, there are also worries that such models may not prove viable in the long run.
A significant aspect of the FINMA’s actions is the regulatory framework regarding client assets. In cases of bankruptcy, assets belonging to clients registered with FinTech institutions are not given special priority and are not protected by deposit insurance. As per legal stipulations, businesses holding a FinTech license must inform their clients explicitly about the absence of such protections.
Looking ahead, the authority is committed to enhancing protections for client assets in the event of an institution’s failure as part of ongoing reforms to financial market regulations. The current FinTech license enables companies to accept public deposits up to a maximum of CHF 100 million or related cryptoassets, provided that these deposits are not invested or accrue interest.
In summary, the initiation of bankruptcy proceedings against SWISS4.0 SA underscores the challenges facing new FinTech ventures in maintaining financial stability. The regulators’ actions highlight both the potential risks for consumers and the need for regulatory improvements to safeguard client interests in the evolving financial marketplace.