When the Bank Your Industry Recommended Stops Banking

A bank built for the businesses others declined

Migom Bank Ltd was incorporated in the Commonwealth of Dominica on 7 August 2019 and licensed as an offshore bank by the Financial Services Unit (FSU) of Dominica's Ministry of Finance. Its parent company's US filings described it as a full-service international bank authorised for deposits, lending, money transmission, card and e-money issuance, custody, foreign exchange and investment banking.

In May 2020 Migom Global Corp., a US-listed company, acquired all of the bank's shares from its chief executive, Thomas A. Schaetti, in exchange for 126,222 common shares valued at $1.136 million. The bank marketed itself as a crypto-friendly digital bank for small businesses and entrepreneurs in emerging markets — the kind of customer that often struggles to open an account anywhere else. At 31 December 2020 the group reported deposits of roughly $15.6 million.

For companies in crypto, payments, gaming and online trading, that positioning mattered. A regulated bank willing to onboard them quickly was rare, and Migom's name travelled through the networks such businesses rely on: other founders, introducers, service providers and advisers.

The warning signs, in hindsight

Some signals were in the public record. Migom Global's annual report for 2020 was not filed with the SEC until April 2022. Contributed articles published later — and not independently verified — describe the bank losing its correspondent banking relationships around the end of 2022, its online platforms going offline and client withdrawals being frozen in early 2023, alongside a dispute over control of the group's holding companies.

Those accounts should be read with caution. What is on the record is what the regulator did next.

What the regulator did

On 29 February 2024 the FSU issued Directive No. 1/2024 under section 25(1) of the Financial Services Unit Act. It ordered Migom Bank to cease engaging in any type of financial business with immediate effect, announced the removal of Mr Schätti as a director, and ordered the bank to stop accepting deposits — fiat or virtual — from new and existing customers. The FSU said it would appoint an administrator with the main objective of recovering clients' deposits and repaying creditors.

On 18 March 2024 the FSU placed Migom Bank Ltd into administration and directed depositors, creditors and other interested parties to submit claims in writing to the administration. The bank's own website now states that, at the direction of the FSU, it is under administrative liquidation.

In August 2024 an investor in Migom Global filed a proposed class action in the US District Court for the Southern District of New York, alleging false financial statements and diverted funds. These were allegations, not findings, and the case was voluntarily dismissed in March 2025.

Contributed articles citing the administrators' work report that around €21 million was traced to Latvia and around €5 million to Lithuania. Those figures have not been independently confirmed. Two institutions named in those reports have had their own licences withdrawn: Latvia's regulator closed Baltic International Bank in December 2022 over weak financial-crime controls, and the Bank of Lithuania revoked the licence of e-money institution Transactive Systems UAB in June 2023 for serious anti-money-laundering breaches.

Four things that are easy to confuse

The Migom case is useful because it pulls apart four things businesses tend to treat as one.

A licence. Migom held one, issued by a national regulator. A licence tells you an institution was authorised at a point in time. It says little about its capital, its correspondent access or its governance today — and the depth of supervision varies a great deal between jurisdictions.

A recommendation. When a bank is suggested by a peer, a consultant or a service provider, the suggestion usually reflects one thing: it was onboarding businesses like yours at that moment. That is useful information. It is not due diligence, and it can go out of date faster than the person passing it on realises.

Onboarding. Getting an account open is the step most businesses celebrate, and for higher-risk sectors it is often the hardest. But a bank may onboard quickly because it is growing fast, competing on risk appetite or short of deposits — none of which says anything about whether it will still be there in two years.

A relationship that lasts.This depends on things outside the account-opening flow: the bank's correspondent network, its capital, its ownership, the reach of its regulator, and whether it can still move your money when you need it to. That is the part that failed Migom's clients.

What fintech and international businesses can take from it

Keep more than one banking relationship, ideally in more than one jurisdiction, and spread operating balances accordingly. A second account opened before it is needed costs far less than one opened in a crisis.

Ask who the bank banks with. Correspondent relationships are the plumbing of any niche or offshore bank. If a bank cannot or will not explain how it clears euros and dollars, that is an answer in itself.

Look at the group, not just the licence. Migom sat beneath US-listed and Austrian holding companies, and a late annual report at the top of that structure was visible well before the regulator acted.

Read the regulator's register and notices yourself, and read them again later. Recommendations age; regulatory notices are dated.

Ask directly whether deposits are covered by any guarantee scheme, and assume they are not until shown otherwise. Know where your funds sit and what happens to them if the bank stops.

Conclusion

There is no basis to say that anyone who mentioned Migom to a client acted in bad faith, and not everyone in the industry did. Whatever the full story turns out to be, the regulator judged the bank's position serious enough to stop it doing business overnight. For the businesses that banked there, a licence, a referral and a working account all looked like reassurance. The one that mattered — whether the bank would still be banking next year — is the one nobody can confirm in advance. The practical response is to plan as though any single bank might stop.