In a development that highlights the challenges faced by innovative financial technology companies, Swiss regulators have been forced to step in and initiate bankruptcy proceedings against SWISS4.0 SA, a small FinTech startup operating under Switzerland's specialized FinTech licensing framework.
Regulatory Action and Bankruptcy
On March 4, 2025, the Swiss Financial Market Supervisory Authority (FINMA) opened bankruptcy proceedings against SWISS4.0 SA after determining the company was facing serious financial difficulties. According to FINMA's statement, there was "justified concern that the institution was overindebted and had serious liquidity problems."
Despite early intervention and demands from regulators for the company to improve its financial situation, SWISS4.0 SA and its leadership were unable to implement adequate measures within the timeframe provided. As a result, FINMA has engaged Valfor Avocats Sàrl to serve as the bankruptcy liquidator for the company.
Impact on Customers
This development affects approximately 250 customers of the micro-startup. What makes this situation particularly noteworthy is the status of client assets under the FinTech license framework in Switzerland. Unlike traditional banking institutions:
- Client assets are not privileged in bankruptcy proceedings
- Deposits are not subject to deposit protection schemes
- FinTech licensees are legally required to explicitly inform clients of these risks
This case highlights an important distinction between traditional banking services and those offered under Switzerland's FinTech license, which was designed to lower barriers to entry for innovative financial businesses.
The FinTech License Framework
Switzerland's FinTech license, established under Article 1b of the Banking Act, was specifically created with reduced supervisory requirements to encourage innovation and new business models in the financial sector. Under this framework, companies can:
- Accept deposits from the public up to CHF 100 million or cryptoassets
- Operate without investing these deposits
- Operate without paying interest on deposits
However, as FINMA noted in its statement, "The likelihood is correspondingly higher that ongoing operations will show that a business model cannot be successfully operated" due to these lower barriers to entry.
Looking Forward
In response to situations like the SWISS4.0 SA bankruptcy, FINMA has indicated it is working on regulatory changes. As part of a project to amend financial market legislation regarding innovative business models, the regulator is "committed to ensuring that client assets will enjoy adequate protection in future in the event of an institution's failure."
This case serves as an important reminder of the balance regulators must strike between fostering innovation in the financial technology sector and protecting consumers and the overall stability of the financial system.
For affected customers of SWISS4.0 SA, further information about the liquidation process will likely be provided by the appointed liquidator, Valfor Avocats Sàrl, in the coming weeks.