The Swiss Financial Market Supervisory Authority (FINMA) has reported that it is receiving increasing levels of enquiries into blockchain, cryptocurrencies and initial coin offerings (ICOs).
Switzerland makes positive steps
FINMA announced its investigation into ICOs in a September 2017 press release, creating speculation that some parts of ICO procedures may already come under existing regulations. They wrote:
“How ICOs are structured from technical, functional and business standpoints varies markedly from offering to offering. ICOs are currently not governed by specific regulations, either globally or in Switzerland.”
They also outlined the present concerns with ICOs, saying that “provisions on combating money laundering and terrorist financing, banking law provisions, provisions on securities trading and provisions set out in collective investment scheme legislation”.
Since then, FINMA has released its annual report for 2017 which shows that a whopping 60% of the enquiries they have received are to do with blockchain, cryptocurrency, smart contracts digital assets and ICOs.
Clampdown but no outright ban
Last September was somewhat of a shaky month for ICOs in Switzerland; FINMA announced the shutdown of groups and associations that had connections with sales of a cryptocurrency that acted in a centralized manner.
The “E-Coin”, being entirely controlled only by those who are selling it, came under fire as they were receiving large sums of money in a similar way to that of the deposit-taking side banks which, without the correct financial market license, is illegal.
Signs of hope in Switzerland
What’s significant is that the financial regulator appears to be treating the technology with far less cynicism than other international regulators have.
Since then, FINMA released another press release in February 2018, outlining the regulator’s intentions to treat carefully selected ICO tokens as securities.
Focusing on the economic purpose and function of tokens, it outlined three categories for the cryptocurrencies: utility tokens, asset tokens and payment tokens. It goes on to say in the release:
“FINMA regards asset tokens as securities, which means that there are securities law requirements for trading in such tokens, as well as civil law requirements under the Swiss Code of Obligations.”.
The Swiss watchdog is opening up favorable doors for the industry to begin to engage in discussions to see how the technology can exist in a compliant legal framework within the country.
It is already the home of The Crypto Valley Association, one of the world’s leaders in distributed ledger and blockchain economics, and the government is often praised by blockchain groups from all over the world for not restricting the movements and innovations up blockchain entrepreneurs and developers.
Switzerland is acknowledging the great potential within the technology and isn’t seeking to shut it down outright, but instead working toward something safer, more practical and functional for the coming future.