The Swiss Financial Market Supervisory Authority FINMA has been one of the most proactive regulators on crypto assets. FINMA divides tokens into three categories on a case-by-case basis (payment, utility, and asset tokens) and regulates them accordingly. FINMA applied the Anti-Money Laundering Act to VASPs and clarified it as part of the latest update to the FINMA-AMLO legislation (Article 10). Additionally, it published guidance covering the Travel Rule on August 26, 2019, which went into effect on January 1, 2020.
Cryptocurrencies are legal across Switzerland. Switzerland has no regulations regarding the buying and selling of virtual currency units or their use as a means of paying for goods and services. In other words, no special approval is required for these activities. (FINMA)
Yes. The Swiss Financial Market Supervisory Authority, FINMA, introduced guidance for the crypto industry covering the Travel Rule on August 26, 2019. FINMA applied the Anti-Money Laundering Act to VASPs in published guidance covering the Travel Rule on August 26, 2019, which was approved as part of the most recent update to the FINMA-AMLO legislation (Article 10).
Yes. FINMA, the Swiss Financial Market Supervisory Authority, introduced Article 10 AMLO-FINMA, guidance for the crypto industry that required information about the client and the beneficiary be transmitted with payment orders on August 26, 2019.
The Swiss Financial Market Supervisory Authority FINMA is the crypto travel rule regulator in Switzerland. FINMA divides tokens into three categories on a case by case basis:
Yes. Under the Anti-Money Laundering Act (AMLA), financial intermediaries that are not members of a self-regulatory organization require a license from FINMA. There are different crypto licenses:
Some trading activities with virtual currencies require a banking license and involve ongoing monitoring by FINMA. This is generally the case when an organization accepts money on a commercial basis from clients and keeps it in its accounts. The same applies to providers who lodge virtual currency holdings from customers in "wallets" and manage accounts for them. However, FINMA's current position is that no banking license is required if virtual currency holdings are transferred for secure safekeeping only and if these virtual currency units are stored separately on the blockchain for each customer. Each deposit can be attributed to an individual customer at all times.
The Crypto Travel Rule went into effect on January 1, 2020. It requires VASPs to implement the travel rule for transaction amounts above $1000 (1,000 CHF) and prove ownership of non-custodial wallets.
On February 7, 2020, FINMA released an amendment to its Anti-Money Laundering Ordinance (AMLO-FINMA), lowering the transaction threshold for the Travel Rule from $5,000 (5,000 CHF) to $1,000 (1,000 CHF).
- Client's name
- Client's account number
- If no account number is available, the financial intermediary shall provide a reference number that refers to the transaction
- Client's address
The address may be replaced with the originator's date of birth and place of birth, their client number, or national ID number.
- Beneficiary's name
- Beneficiary's address
The originator VASP shall ensure that this information is accurate and complete.
Guidance from the Swiss Financial Market Supervisory Authority FINMA, does not include differences in requirements for customer PII for cross-border transfers vs transfers within Switzerland.
FINMA goes explicitly further than the FATF requirements and deny the transfer of funds to unregulated wallet providers:
For such systems or such agreements to meet the requirements of Article 10 AMLO-FINMA in future, they would have to involve only service providers who are subject to appropriate anti-money laundering supervision. Unlike the FATF standards, Article 10 AMLO-FINMA does not provide an exception for payments involving unregulated wallet providers. Such an exception would favor unsupervised service providers and would result in supervised providers not being able to prevent problematic payments from being executed.
There is an exception for sending to a customer's own wallet but proving the beneficial ownership is vital to compliance.
As long as an institution supervised by FINMA is not able to send and receive the information required in payment transactions, such transactions are only permitted from and to external wallets if these belong to one of the institution's own customers. Their ownership of the external wallet must be proven using suitable technical means. Transactions between customers of the same institution are permissible. A transfer from or to an external wallet belonging to a third party is only possible if, as for a client relationship, the supervised institution has first verified the identity of the third party, established the identity of the beneficial owner and proven the third party's ownership of the external wallet using suitable technical means.
Notabene helps Swiss financial institutions and VASPs comply with the FATF's Recommendation 16 "Crypto Travel Rule" as required by the FiNMA and the European Commission. Our end-to-end solution gives Swiss VASPs and Financial Institutions the tools to roll out a staged approach to compliance, prove ultimate beneficial ownership of customer's blockchain accounts, while our protocol-agnostic approach allows VASPs to share required PII before sending and receiving crypto transactions to and from any jurisdiction.