Switzerland embraces bitcoin & cryptocurrencies amid global crackdown
While financial regulators across the world are cracking down on bitcoin, Swiss Financial Market Supervisory Authority (FINMA) has decided to encourage digital currencies by issuing guidelines on initial coin offerings (ICOs).
According to the regulator, Switzerland has recently seen a sharp growth in the number of upcoming ICOs planned to be launched in the country, as well as numerous enquiries about cryptocurrency regulation. In an attempt to encourage the ICO market and blockchain technology, FINMA has clarified how standards around anti-money laundering and securities regulations could be applied to virtual currencies.
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“The application of blockchain technology has innovative potential within and far beyond the financial markets. However, blockchain-based projects conducted analogously to regulated activities cannot simply circumvent the tried and tested regulatory framework,” FINMA chief executive Mark Branson said.
“Our balanced approach to handling ICO projects and enquiries allows legitimate innovators to navigate the regulatory landscape and so launch their projects in a way consistent with our laws protecting investors and the integrity of the financial system,” the CEO highlighted.
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In assessing ICOs, the regulator will focus on the economic function and purpose of the tokens, or blockchain-based units, issued by the organizer. As the current regulatory base lacks generally recognized terminology for the classification of tokens both in Switzerland and internationally, FINMA has categorized tokens and ICOs of those tokens into three categories: payment tokens, utility tokens and asset tokens.
“ICOs can also exist in hybrid forms of the above categories. For example, anti-money laundering regulation would apply to utility tokens that can also be widely used as a means of payment or are intended to be used as such,” the press release said.
Earlier this year, South Korea banned the use of anonymous bank accounts in cryptocurrency trading amid deep concerns over potential money laundering and other crimes. At the same time, a senior official at the People’s Bank of China urged for a blanket ban on services related to cryptocurrency trading in the country.
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