Switzerland -- Securities Classification Regulatory Overview

Switzerland classifies cryptocurrency tokens as securities under a formal legal test based on three criteria: (1) standardization (unified terms), (2) suitability for mass trading (public offer in identical form or placement with >20 non-individual clients), and (3) formal appearance as certificated securities (Wertpapiere), uncertificated securities (Wertrechte), derivatives, or intermediated securities (Bucheffekten). [2][3][5] This differs from the U.S. Howey test, which emphasizes investment expectation of profits from others' efforts; Swiss law focuses on form, tradability, and economic function per FINMA guidelines, without statutory crypto-specific rules or case law defining tokens as securities.[1][2][3]

Token Types Considered Securities

FINMA first categorizes tokens by economic function—payment tokens (e.g., cryptocurrencies like Bitcoin for payment), utility tokens (access to services), and asset tokens (representing assets like shares, bonds, dividends, or physical property)—then assesses securities status.[1][4][5][7]

• Asset tokens (also called security or investment tokens) are generally treated as securities if standardized and mass-tradable, as they mimic uncertificated securities or derivatives (e.g., tokenized equity or bonds).[1][2][3][4][5][6]
• Utility tokens qualify as securities if they have an investment purpose at issuance (e.g., pre-functional or pre-sale tokens promising future utility with profit expectation).[3][5]
• Payment tokens are typically not securities but may qualify if functioning as derivatives (e.g., certain stablecoins) or in pre-sale scenarios creating uncertificated claims.[2][3][5][7]
• Hybrid tokens (blending categories) are regulated by the strictest applicable rules, often as securities if any investment traits exist.[1][6] NFTs and some stablecoins (e.g., those enabling physical asset trading) may also qualify based on function.[1][2]

Key legislation: Swiss Financial Markets Infrastructure Act (FMIA, Art. 2 lit. b) defines securities (Effekten); Swiss Code of Obligations applies civil duties.[2][3][4][5] Relevant FINMA guidance: ICO Guidelines (2018, updated) and Cryptoassets Fact Sheet (available at finma.ch).[5][7]

Registration/Exemption Requirements for Token Issuers

Issuers of security-classified tokens must comply with securities laws:

• Prospectus requirements under FinSA for public offers, unless exemptions apply (e.g., private placements to qualified investors <500 persons).[1][4]
• If tokens represent deposits or banking products, a full banking license is needed.[5]
• Securities firm license required for professional creation or client trading of securities tokens.[2] FinTech licenses may apply for certain services; AML rules mandatory for all token types via self-regulatory organizations.[1][7] No blanket exemptions; case-by-case FINMA analysis for hybrids.[1]

Secondary Trading Rules

• Trading security tokens on regulated exchanges requires adherence to securities trading rules, including investor protections under FMIA/FinSA.[1][2][4]
• Professional traders need a securities firm license; client trading triggers financial service provider duties.[2]
• Blockchain tokens satisfy uncertificated security form requirements per FINMA.[3][5]

Enforcement Examples

Search results provide no specific FINMA enforcement cases but note regulatory focus on ICOs (e.g., Alpine Holdings' RETokens classified as asset tokens requiring prospectus).[1] General compliance emphasis via 2025 updates and guidelines.[1][4] For official guidance, see FINMA's Cryptoassets Fact Sheet: https://www.finma.ch/en/~/media/finma/dokumente/dokumentencenter/myfinma/faktenblaetter/faktenblatt-kryptobasierte-vermoegenswerte.pdf [7] and ICO Guidelines (referenced in sources).[5]