Crypto-funded debit card in Switzerland

FINMA — All financial market supervision — licensing, AML enforcement, ICO/STO guidance, stablecoin regulation

SROs (VQF, SO-FIT, AOOS) — Self-regulatory organizations for financial intermediation — common path for smaller crypto businesses

DLT Act (Federal Act on Adaptation to DLT) (2021) — DLT securities, DLT trading facilities, crypto asset segregation in bankruptcy — amends 10 federal laws

AMLA (Anti-Money Laundering Act) (1998) — AML/CFT for VASPs — strict KYC/CDD, suspicious activity reporting, Travel Rule

FinIA (Financial Institutions Act) (2020) — Financial institutions licensing — asset managers, trustees

Banking Act / FMIA (1934) — Banking license, DLT trading facility license, securities dealer license

VASP: Activity-dependent — no single 'crypto license'. SRO membership (1-3 months, no minimum capital): exchange, brokerage. FinTech license (3-6 months, CHF 300K): deposit-taking up to CHF 100M without lending. Banking license (12-18 months, CHF 10M+): full banking. DLT Trading Facility (6-12 months): multilateral DLT securities trading.

CUSTODY: Banking license or FinTech license required for holding client crypto assets. DLT Act provides legal certainty — client crypto segregated in custodian bankruptcy.

EXCHANGE: DLT trading facility license (new FMIA category), banking license, or SRO path depending on scale. FINMA no-action letters available for regulatory clarity.

Technology Neutrality: Regulation focuses on the economic function and purpose of an asset or activity, not the underlying technology. This means that if a crypto asset or service performs a function traditionally regulated by financial law, it will be subject to those regulations.

Proactive and Innovation-Friendly: Switzerland, particularly through its financial market regulator FINMA (Swiss Financial Market Supervisory Authority), has been quick to provide guidance and adapt laws to accommodate blockchain innovation, exemplified by the "Crypto Valley" initiative in Zug.

Licensing and Authorization: FINMA grants licenses for financial market activities. Depending on the nature of a crypto project, a FINMA license (e.g., banking, securities dealer, FinTech, DLT trading facility) might be required.

Definition: Tokens intended to be used purely as a means of payment and are not linked to a specific project. Examples: Bitcoin, Ether.

Regulation: Primarily subject to Anti-Money Laundering (AML) regulations. If services related to these tokens (e.g., exchange, custody) are offered, an AML license is typically required. They are generally not classified as securities under Swiss law if their sole function is payment.

Anti-Money Laundering Act (AMLA/GwG): Core legislation mandating AML/CFT obligations for financial intermediaries, including VASPs handling cryptocurrencies, custodians, and exchanges. It requires joining a recognized SRO and full compliance with KYC, record-keeping, and reporting.

FINMA AML Updates (e.g., September 2021): Lowered KYC thresholds for crypto transactions and mandated enhanced due diligence (EDD) under the AML/CFT framework.

Threshold: KYC mandatory for transactions exceeding CHF 1,000 per month; prove ownership of non-custodial wallets.

Enhanced Due Diligence (EDD): Required for high-risk clients (e.g., PEPs), unusual transactions, or third-party involvement; includes ongoing risk reviews and client segmentation.

Collect personally identifiable information (PII) to prevent fraud, identity theft, and money laundering.

Internal controls, staff training, and transaction monitoring (e.g., blockchain analytics for amounts over CHF 1,000) are required.

Retain client identification data, beneficial owner details, and transaction records for at least 10 years (per AMLA standards).

Conduct regular, risk-based reviews to keep data current; applies to both supervised and SRO-affiliated VASPs.

Swiss Financial Market Supervisory Authority (FINMA): Primary overseer; licenses exchanges, issues guidelines (e.g., token classification), enforces AML, and supervises banking/securities activities involving crypto.

Money Laundering Reporting Office Switzerland (MROS): Handles suspicious activity reports under AMLA.

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Private investors: Capital gains from selling, trading, or disposing of crypto are tax-free, regardless of holding period or transaction volume, as they qualify as private wealth assets (similar to securities).

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