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