Switzerland tightens the screws on crypto transaction regulations

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Cryptocurrency is about to take a major hit in Switzerland.  Previously, the country’s financial regulator, the Swiss Financial Market Supervisory Authority (FINMA), had set a limit of 5,000 francs (about $5,110) before identification was required for a crypto transaction.  However, in updating its guidelines last week, that limit was drastically cut, lowering it to just 1,000 francs ($1,020).  FINMA asserts that the new threshold, if approved, is necessary to combat money laundering with the greater risk associated with digital currencies, but fall in line with what other countries are introducing, as well.

In June of last year, the Financial Action Task Force (FATF) recommended that the cap on identification-free transactions be placed at $1,000; anything above that would require verifiable personal data.  FINMA explains in a press release, “The new Financial Services Act (FinSA) and Financial Institutions Act (FinIA) oblige the Swiss Financial Market Supervisory Authority FINMA to pass a number of implementing provisions, which are mainly technical in nature. FINMA is therefore presenting a new, streamlined ordinance, amending current ordinances and circulars and abolishing three circulars. FINMA will hold a consultation on the follow-up regulation up to 9 April 2020.”

The FATF’s recommendations are just that – suggestions on what member countries should do.  However, to date, the recommendations have always been received positively and implemented where applicable. 

Switzerland’s latest updates reflect not only the FATF’s recommendations, but rules implemented by the European Union (EU) last year.  Switzerland, while a member of the European Free Trade Association, is not part of the EU, but has become more attached to policies and regulations the group rolls out. The EU just introduced its new Fifth Anti-Money Laundering Directive (5AMLD) last year, among the provisions of which were included the ability for financial intelligence units to access crypto wallet data and stricter transaction reporting guidelines.  The new directive explained, “The amendments proposed seek to ensure a proper balance between the need to ensure protection of privacy and of personal data and the need for more transparency in financial and economic activities.”

Provided there is no significant resistance, which isn’t likely, the new guidelines will be implemented sometime during the fourth quarter of the year.  As such, it’s likely that the number of options to conduct crypto transactions in Switzerland will fall substantially.  However, at the same time, it’s another example of how the Bitcoin ecosystem continues to mature and evolve, allowing it to operate on levels similar to those found in the fiat space.