Swiss Financial Markets Regulator Publishes Regulatory Guidance For Blockchain-Based Payments


The Swiss Financial Market Supervisory Authority (FINMA) today published new regulatory guidance for blockchain-based payment transactions.

In its guidance published on Monday 26 August, FINMA clarifies how it applies Swiss anti-money laundering (AML) rules to financial services providers supervised by it in the area of blockchain technology. The guidance applies to blockchain service providers such as exchanges, wallet providers and trading platforms.

According to FINMA blockchain-based business models cannot be allowed to circumvent the existing regulatory framework. This applies particularly to the rules for combating money laundering and terrorist financing, where the inherent anonymity of blockchain technology presents increased risks.

According to the new guidelines, institutions supervised by FINMA are only permitted to send cryptocurrencies or other tokens to external wallets belonging to their own customers whose identity has already been verified and are only allowed to receive cryptocurrencies or tokens from such customers.

FINMA-supervised institutions are thus not permitted to receive tokens from customers of other institutions or to send tokens to such customers. This practice applies as long as information about the sender and recipient cannot be transmitted reliably in the respective payment system. Unlike the FATF standard, this established practice applies in Switzerland without the exception for unregulated wallets and is therefore one of the most stringent in the world.

Cointelegraph says that the key takeaway is that the regulator seeks to make sure that blockchain service providers conduct proper Know Your Customer (KYC) checks, which

can help identify suspicious transactions. The guidance follows the guidelines published by the Financial Action Task Force (FATF) on virtual assets and related providers in June this year.

In addition, for the first time, FINMA has issued banking and securities dealers’ licences to two pure-play blockchain service providers. The companies involved are SEBA Crypto AG registered in Zug and Sygnum AG registered in Zurich, which will offer services for institutional and professional customers. As usual, various conditions are attached, ensuring that the businesses are set up in an orderly manner. The practice set out in the guidance published today applies in full to the supervision of the two new institutions.

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