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Dominica’s Financial Services Unit (FSU) has turned Migom Bank’s two-year meltdown into a structured recovery drive. A statutory administrator appointed in March 2024 traced more than €26 million in wayward deposits, most of it sitting in Latvia and Lithuania. Regulators have already launched criminal cases, filed restraint-order applications, and signaled that an internationally recognized liquidator will take charge in May 2025. Creditors who have completed “know-your-customer” checks could see the first repayments once frozen balances are released—arguably the first piece of genuinely good news since Migom went dark. By way of reminder, the collapse began in early 2023, when Migom’s platforms abruptly went offline, correspondent banking ties unraveled, and regulators uncovered a capital shortfall severe enough to halt withdrawals and force the bank into insolvency.
On 29 February 2024, the FSU issued a directive ordering Migom Bank to “cease to engage in any type of financial business” and removed sole director Thomas Adrian Schätti. Nineteen days later, on 18 March 2024, the same agency elevated the situation by appointing a joint U.K. law-and-accountancy team as a statutory administrator with authority over every ledger, server, and court filing.
The administrator’s first circular laid out a five-point mandate: (1) verify depositor claims, (2) refresh KYC data, (3) trace domestic and cross-border transfers, (4) report findings to the FSU, and (5) recommend either reconstruction or liquidation. The process replaced the bank’s single-director model, long criticized in op-eds for creating an accountability vacuum, with multi-disciplinary oversight.
After combing through 14,000 pages of statements, e-mails, and crypto-wallet logs, the administrator produced a 153-page cover report in August 2024. The document concludes that Mr Schätti (assisted by long-time business partners Jürgen Blaha and Gregory Donahue) diverted both fiat and digital assets to an international web of affiliates. These include Migom Investments SA in Luxembourg, Migom Investment FZE in the UAE, Migom Verwaltungs GmbH in Austria, Migom Ltd in Ghana, two Delaware-registered entities in the United States and Spectrum Payments Inc. in Canada. Funds belonging to private customers were mixed and moved without consent, a behavior the report characterizes as theft and embezzlement.
Regulators accepted the findings and, working with the Commonwealth’s police and attorney-general, opened parallel criminal inquiries in Europe and North America. The administrator recommended immediate restraint orders to freeze assets before they could be dissipated.
The forensic trail shows that €21 million of customer cash was ploughed into shares of Baltic International Bank (BIB). The gamble backfired when the European Central Bank withdrew BIB’s license on 11 March 2023. Latvia’s Court of Economic Affairs placed BIB into liquidation two weeks later—a silver lining for Migom creditors because the shares (and any cash proceeds from their sale) are now under court control and traceable.
Another €5 million lies idle in Lithuania. The Bank of Lithuania revoked the electronic money license of Transactive Systems UAB and fined it €280 000 in June 2023 for “serious and systematic” anti-money-laundering failures, effectively freezing all client balances. The administrator has filed evidence in Vilnius seeking recognition of Dominica’s administration order so that the funds can be transferred to the eventual liquidator.
Smaller sums are still being tracked across Austria, Luxembourg, the United Arab Emirates, the United States, and Ghana—jurisdictions where entities tied to Mr Schätti are incorporated. Latvian business press reports that police raids on BIB in late 2022 already gathered account documentation likely to speed up recovery.
The FSU has confirmed that it is short-listing “internationally acknowledged” insolvency houses and expects to make an appointment in early May 2025. Once in post, the liquidator will have statutory power to sue, negotiate settlements, and distribute recoveries to creditors who lodged documentation during the administration. More than 70 percent of claimants have cleared KYC, according to people familiar with the process, meaning payouts could flow quickly once court releases are obtained.
A securities action filed last August in the Southern District of New York was voluntarily dismissed on 12 March 2025. Plaintiffs reserved the right to re-file within 30 days, this time armed with the administrator’s tracing evidence and expanding their pleadings to constructive trust and cross-border tracing theories. Lawyers say the new complaint could widen the recovery pool for U.S. shareholders and align civil discovery with the criminal probes already underway in Dominica.
Migom’s collapse underscores the weaknesses of single-director governance in small-state fintech banking. Dominica requires only US $2 million in paid-in capital for an offshore banking license; critics argue the threshold encourages under-resourced operations. Yet the swift cease-business order, the appointment of an administrator, and the forthcoming liquidation show that small regulators can act decisively when presented with a watertight evidentiary package.
For thousands of depositors who have spent two years in limbo, the narrative has finally flipped. The money trail is mapped, key balances are already frozen in court or central bank accounts, and an experienced liquidator will soon have the legal tools to collect and distribute what was lost. Litigation and asset hunts will continue (cross-border banking scandals rarely resolve overnight), but Migom Bank’s administration has moved the story from despair to structured restitution. If all goes as planned, 2025 could be the year cheques start replacing headlines.
