31 Jul 2022

Comply with FINMA regulations with Automated KYC

This monthly update takes a look at FINMA Regulations for Crypto Companies in Switzerland:​

Perhaps more than any other nation, Switzerland is known for its banking sector. While the country has been a global financial hub for centuries, it’s also now home to more than 900 blockchain businesses. This vibrant crypto scene is closely connected to Swiss crypto laws that take a positive approach towards digital ledger technologies (DLT). 

Acting on significant pressure from global financial regulators and powerful governments seeking to rein in money laundering in their own jurisdictions, the Swiss financial sector has been undergoing a major shift over the past two-and-a-half decades. In 2002, the Swiss government established the Swiss Financial Market Supervisory Authority (FINMA) as a private, independent regulatory body.

VASPs (Virtual Asset Service Providers) looking to be based in Switzerland need to apply for a license from FINMA. In order to meet FINMA’s requirements, VASPs need to carry out Enhanced Due Diligence (EDD) and stringent KYC (Know-Your-Customer) checks with respect to AML (Anti-Money Laundering) and CFT (Combatting the Financing of Terrorism). 

In order to comply with FINMA regulations, crypto companies doing business in the country –need to follow compliance protocols that include:

  • Customer due diligence (CDD): Crypto companies need to collect KYC data on customers they onboard in order to verify their identities and to ascertain the nature of their business.
  • Sanctions, Watchlist and PEP screening
  • Adverse media searches
  • Ongoing monitoring

In 2016, the Swiss Financial Market Supervisory Authority (FINMA) started allowing Swiss-based financial institutions to use online identity verification to fulfill Swiss Anti-Money Laundering Act due diligence requirements. 

This means that customers can now be verified remotely and no longer need to visit a local branch in order to open an account.How KYC-Chain can help

KYC-Chain’s identity verification solutions use AI, machine learning, face-based biometrics and liveness detection to ensure the person behind a transaction is present and who they say they are. Identity verification goes well beyond traditional authentication methods to deliver a significantly higher level of assurance and establish a trusted digital identity.

Using market-leading technology such as KYC-Chain can allow projects and companies to quickly and easily attain compliance with FINMA and FATF regulations using a seamless and automated process.

Interested in using KYC-Chain to reach FINMA compliance? Get in touch and we’ll be happy to start a conversation.

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