The FINMA Swiss bring stricter anti-money laundering (AML) rules for crypto transactions

The Swiss financial market watchdog (FINMA) is planning to bring tighter anti-money laundering (AML) rules for cryptocurrency transactions. It seems that Switzerland is currently expanding its financial regulatory framework. Several upcoming rules will strengthen monitoring in the Blockchain industry to comply with new international standards regarding operations with digital assets.

FINMA Swiss updates the cryptocurrency finance legal framework

The Swiss financial market watchdog (FINMA) has proposed changing the customer identification threshold values ​​set in the Anti-Money Laundering Ordinance. For now, it seems that FINMA is seeking to lower the limit for cryptocurrency exchange transactions that require user verification from the current 5,000 Swiss francs to only 1,000 francs (slightly larger than $ 1,000). According to FINMA, they have acknowledged the growing risk of money laundering in this area. Still, this measure may not be like many crypto businesses operating in the country and customers sensitive to their privacy.

This regulatory update is a result of Switzerland’s new Financial Services Act and the Financial Institutions Act. Both bills. The Swiss parliament passed both laws in June 2018. During a meeting in November 2019, the Federal Council, holding executive power, decided that they would take effect on January 1. January 2020 with ordinances on financial services, institutional finance, and supervisory organization.

The two statutes mandate FINMA to adopt different enforcement provisions, primarily technical. FINMA has created a new Financial Institution Ordinance, which details professional compensation insurance for portfolio managers, trusts and collective asset management, details on how The minimum threshold calculator to be authorized is the portfolio manager and risk manager and internal control system for collective asset managers.

According to the press release, the financial supervision agency has prepared to amend other ordinances and circulars. The government will also repeal three circulars that will become redundant after the introduction of new regulations. Changes will be made to the public within the next few months.

Switzerland adheres to international AML standards

Like many other countries, Switzerland is taking steps to implement new global measures for cryptocurrency assets adopted by the Financial Action Task Force (FATF) last year. As recommended by intergovernmental organizations, cryptocurrency processors such as exchanges, wallet providers, and payment processors should verify e-money transfer customers worth more than $ 1,000 or 1,000 Euro.


FATF Plenary in session

More stringent diligence requirements in Europe were also introduced with the EU’s Fifth Anti-Money Laundering Directive (AMLD5), which member states are expected to switch to national law on January 10. 2020. Strict regulations have forced some businesses from this sector to close or move to more friendly jurisdictions instead of completely changing their business models and risk losing customers.

Until now, Switzerland has been a magnet for cryptocurrency companies thanks to its positive attitude towards the industry and favorable regulations. Its traditional financial institutions have gradually begun working with Blockchain startups. The Crypto Valley, centered on the states of Zug, is now home to more than 800 of these businesses that created 1,000 new jobs alone in 2019. Only time will know the Swiss government is managing to keep them in the country or not.

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