Swiss regulator acknowledges heightened money-laundering risks in cryptocurrency area

Maria Nikolova

FINMA seeks to lower client identification threshold values in its Anti-Money Laundering Ordinance from CHF 5,000 to CHF 1,000 for transactions in cryptocurrencies.

The Swiss Financial Market Supervisory Authority (FINMA) aims to pass new rules affecting transactions in cryptocurrencies.

The new Financial Services Act FinSA and Financial Institutions Act FinIA came into force on January 1, 2020, along with the implementing ordinances – Financial Services Ordinance (FinSO), Financial Institutions Ordinance (FinIO) and Supervisory Organisations Ordinance (SOO) – passed by the Federal Council. These laws oblige FINMA to pass a number of implementing provisions pertaining to selected, mainly technical issues. As a result, FINMA has created a new Financial Institutions Ordinance (FinIO-FINMA) as well as amendments to current FINMA ordinances and circulars.

FINMA will hold a public consultation on the new regulations up to April 9, 2020.

In particular, the regulator seeks to lower of the threshold value for exchange transactions in cryptocurrencies. FINMA proposes amending the client identification threshold values in its Anti-Money Laundering Ordinance (AMLO-FINMA) from CHF 5,000 to CHF 1,000 for exchange transactions in cryptocurrencies.

Through these measures, FINMA is implementing the international standards approved in mid-2019 and acknowledging the heightened money-laundering risks in the cryptocurrency area.

This skeptical stance regarding cryptocurrencies seems to be in tune with recent statements made by Switzerland’s Federal Council. In Decembe 2019, Switzerland’s Federal Council approved a report examining the opportunities and risks of introducing a cryptofranc (e-franc). The Council concluded that universally accessible central bank digital currency would bring no additional benefits for Switzerland at present. Instead, it would give rise to new risks, especially with regard to financial stability. The analysis conducted for the report shows that the introduction of a central bank digital currency will result in repercussions that can be far-reaching depending on the design, and that there are better solutions for most of the areas considered. The Federal Council therefore believes that universally accessible central bank digital currency would not bring any additional benefits at the moment.

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