Switzerland – FinTech and Blockchain Law Watch

FINMA publishes ICO guidelines

Feb 28 2018

By Rizwan Qayyum

The Swiss Financial Market Supervisory Authority (“FINMA”) have published guidelines on initial coin offerings, after receiving numerous requests for guidance from start-ups aiming to launch their own ICO and considering Switzerland as their jurisdiction. Having reviewed the document, its evident that FINMA have aimed to create a regulatory environment which balances the central tenet of consumer protection whilst existing in an ecosystem conducive to innovation. The guidelines can be found here.

FINMA CEO, Mark Branson commented: “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. 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”.

FINMA notes that they have identified a sharp increase in the number of ICOs planned or executed in Switzerland, alongside the increased activity relating to enquiries about the current regulatory framework and its applicability.

ICOs in Switzerland

Oct 12 2017

By Jonathan Lawrence

The Swiss Financial Market Supervisory Authority (FINMA) issued guidance on initial coin offerings (ICOs) on 29 September. FINMA has observed a marked increase in ICOs conducted in Switzerland. It has therefore published FINMA Guidance 04/2017 on this topic. FINMA has also indicated that it is investigating a number of ICO cases to determine whether Swiss regulatory provisions have been breached.

FINMA observes that the structuring of ICOs 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. Swiss legislation on financial markets is principle-based; one such principle is technology neutrality. Collecting funds for one’s own account without a platform or issuing house is unregulated from a supervisory perspective in cases where repayment is not obliged, payment instruments have not been issued and no secondary market exists.

Switzerland and Israel sign cooperation agreement

Sep 13 2017

By Jonathan Lawrence

Swiss and Israeli financial regulators entered into a FinTech cooperation agreement on 4 September. The Swiss Financial Market Supervisory Authority (FINMA), the Israeli Capital Markets Insurance and Savings Authority (CMISA) and the Israel Securities Authority (“ISA”) intend to cooperate with the aim of encouraging and enabling innovation in their respective financial services industries and of supporting financial innovators in complying with the regulations in each other’s jurisdictions.

The agreement sets out existing activities in the FinTech regulatory space by each regulator. The new cooperation will include information sharing (including on regulatory issues), support to financial innovators from the other’s country (including help to understand the relevant regulatory environment), dialogue on new innovations and knowledge and expertise sharing.

Blockchain Fuels Crypto Valley Zug

Nov 02 2016

By Susan P. Altman

Blockchain startups are fueling growth of innovative companies in the small canton of Zug, Switzerland, dubbed the “Crypto Valley” (and yes, it’s written as “CryptoValley” in German, and not translated into “CryptoTal”). This approximately 20-mile valley between Zurich and Zug is home to the Ethereum Foundation and more than a dozen other blockchain technology companies. Crypto Valley has a long way to go before it catches up to blockchain investment levels seen in Silicon Valley or the other top investment countries of UK, Israel, Sweden, Germany and Argentina. What is driving Crypto Valley’s growth?

CoinDesk reports that the laissez-faire philosophy that makes Swiss banks so valuable is the same philosophy driving the development of Crypto Valley. Switzerland, with its deeply decentralized government, appears to be a fertile environment in which innovation can flourish. For instance, Zug’s local government is experimenting with permitting citizens to pay for government services up to 200 Swiss francs (just over USD 200) with bitcoin. Switzerland has a host of other advantages for blockchain innovation: a stable, neutral political system, low taxes (especially in Zug), a renowned culture of financial privacy, and an available talent pool. It will be interesting to watch whether and how the decentralized political and economic environment of Switzerland accelerates the decentralized promise of blockchain technology.

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