After years of controversy, mismanagement, and operational and restructuring difficulties, Migom Bank is finally preparing for a potential recovery. 2025 could mark the end of one of the longest sagas in the banking sector.
Migom Bank, once a promising neobank project based in Dominica, stopped operations on Feb. 29, 2024, after its customers complained about not having access to their funds. Before the shutdown, the bank had built a strong reputation in Europe, Asia, the Baltics, and Africa. Migom served clients from different industries like fintech, gaming, and crypto, to name a few.
However, the troubles for Migom surfaced in early 2023 when regulators noticed capital shortfalls. The Dominican Financial Services Unit issued a directive for the bank to cease all financial activities and removed its CEO, Thomas Adrian Schätti, who is a Swiss national.
Despite all the drama, the bank’s administrators are optimistic about the potential restructuring of Migom Bank and distributing the funds back to their rightful owners.
How Did Migom Bank Collapse?
According to a filing made in New York on Aug. 30, 2024, Schätti failed to file required financial statements with the SEC and filed false financial statements with the government of Dominica. This led to the bank’s collapse and the loss of over $750 million in public market capitalization.
This group of affected stakeholders has decided to pause their legal efforts, with plans to bring it back soon with broader claims, thanks to the new documents shared by the administrator.
In August 2024, the Statutory Administrator, a joint venture between established UK law and accounting firms, submitted a comprehensive report to Dominica’s Financial Services Unit. The report included over 14,000 pages of supporting documents, summarized in a 153-page cover letter prepared by the lead UK barrister overseeing the administration.
The administrator’s report suggests that Schätti used his authority to move millions of dollars worth of fiat and crypto assets to entities he controlled. These companies were located in different jurisdictions — Migom Investments SA (Luxembourg), Migom Investment FZE (UAE), Migom Verwaltungs GmbH (Austria), Migom Ltd (Ghana), Migom Global Corp & Migom Investments SA LLC (USA), and Spectrum Payments, Inc. (Canada).
The 14,000-page document collection shows that Schätti was responsible for outlined governance issues and unauthorized fund transfers that significantly impacted Migom Bank’s operations and customer trust. These findings highlight a breakdown in internal controls at a bank once positioned to serve underbanked communities globally.
Moreover, the report found that Schätti’s unauthorized fund movements stole funds not only from Migom Bank’s customers but also from the Government of the Commonwealth of Dominica.
The transactions were neither approved by Migom Bank’s board nor had a regular sign-off, which led to being marked as theft. The administrator’s report uncovered that Schätti was not alone in this operation. He received help from two lieutenants — Juergen Blaha and Gregory Donahue — to move the funds.
Where Did the Funds Go?
The companies controlled by Schätti were located in different jurisdictions.
Latvia’s Baltic International Bank SE is leading the list with €21 million received from the Migom Bank former director. Interestingly, the European Central Bank revoked the Latvia-based bank’s license in March 2023 for violating anti-money laundering law.
One of Migom’s correspondent financial institutions in Lithuania, known as UAB, received €5 million from Schätti. The Bank of Lithuania officially cancelled UAB’s e-money license in June 2023 and froze the stolen funds.
Current Developments
Regulators in Roseau, the capital of Dominica, urgently responded to the Migom Bank collapse. The country’s FSU, right after the cease-and-desist order in February 2024, created mutual legal assistance treaties, known as MLATs, with European and North American authorities.
MLATs initiated cooperative engagements with financial regulators — in this case, tracing lost assets. While this was a rare move for a small Caribbean country, it clearly showed how serious the situation was.
Migom Bank and the authorities are optimistic about finding Schätti and his associates to hold them accountable for stealing millions from their customers.
The next step for the bank is to appoint a liquidator to oversee the recovery and fund distribution process, ensuring that the assets are returned to compliant account holders. The liquidator will be appointed by the Government of Dominica to prevent any further fraudulent activities.
Conclusion: The Path Forward
Migom Bank may have seen its reputation shaken due to the mismanagement of the funds by its former director and his associates, but it’s now shifting toward accountability and resolution.
The administrator’s report, along with the current efforts, indicates a shift toward transparency, regulatory compliance, and restitution. Moreover, the actions of the regulators in Dominica and the MLATs suggest a bold attempt from a small jurisdiction against a high-profile heist that involves tens of millions of dollars.
While a full recovery might seem quite unreachable at this point, the solid evidence and support from the Government of Dominica offer hope to both the Migom Bank investors and customers.
For now, the recovery process offers a renewed sense of clarity, and the customers are finally seeing light at the end of a very long and dark tunnel, with a potential recovery for Migom Bank.
