Swiss regulator carries out investigations into 60 ICOs in 2019

Maria Nikolova

FINMA identified a breach of the Anti-Money Laundering Act at more than ten ICOs and brought charges against the responsible people.

Switzerland’s Financial Market Supervisory Authority (FINMA) today published the key findings of its 2019 Annual Report.

Last year, FINMA focused its risk-oriented supervision on how firms are coping with the risks arising from low or negative interest, specifically in the real estate market. It was also in close contact with the industry with regard to the risks relating to cyber attacks, Brexit and the transition from LIBOR. Furthermore, FINMA clarified a whole host of technical questions related to business models based on new uses of technology.

In addition, ten years after the financial crisis FINMA confirmed that the emergency plans for the systemically relevant functions of the two major Swiss banks are now effective.

Finally, FINMA considered how the topics of sustainability and risks posed by climate change are to be dealt with under supervisory law.

In 2019, FINMA conducted 1,185 investigations, up from 1,086 investigations in 2018, and 30 enforcement proceedings, down from 42 launched in 2018. Its Enforcement division looked closely at initial coin offerings (ICOs) in Switzerland in 2019.

Overall, FINMA carried out investigations into approximately 60 ICOs, of which more than half could be concluded. The regulator identified a breach of the Anti-Money Laundering Act (AMLA) at more than ten ICOs and brought charges against the responsible people. Eight further cases resulted in entries being made on FINMA’s warning list due to suspected illegal conduct.

Enforcement proceedings were ultimately opened against three companies.

Let’s recall that, in March 2019, FINMA concluded the enforcement proceedings against envion AG, which it launched in July 2018. As part of its proceedings, FINMA appointed an investigating agent to investigate suspicious activity on site. The probe showed that the company had unlawfully accepted funds amounting to over CHF 90 million from at least 37,000 investors in the context of an initial coin offering (ICO) without the necessary statutory licence. The company was thus acting illegally and seriously violated supervisory law.

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