It is no secret that Switzerland has been clamping down crypto activities with full force in recent years. Authorities in the country had at some point set a stricter regulatory framework to govern crypto. But when Switzerland dropped from the second position in the rankings for ICO funds realized, the government chose to encourage banks to accept digital token firm account holders in a bid to ease regulatory requirements for cryptos.
Switzerland’s New ICO Regulation Hasn’t Been All Rosy As The Country Looks to Facilitate Banking System Access For Cryptos
Switzerland is bleeding virtual currency businesses to its foreign rivals including the British Virgin Islands, Liechtenstein, Gibraltar, and the Cayman Islands, since the publishing of country’s new ICO guidelines this February. The new ICO regulation, which highlights three kinds of token options (payment, utility, and asset). Tokens will require anti-money laundering compliance to be used for payment or legal tender. However, it is no secret that some virtual currency entrepreneurs no longer have an interest in establishing in the European country.
The Crypto Sector Has Also Played Their Part
The cryptocurrency sphere in Switzerland has asked the Swiss National Bank or central bank, to help relieve them from the stress or rigorous process of opening bank accounts in regular banks since the new legislation came into play. Zuercher Kantonalbank has closed close to 20 accounts of cryptocurrency entities as of 2017, with only a specific percentage of the country’s 250 banks choosing to allow cash deposits of the equivalent of digital currency to be raised in ICO’s. Banca Zarattini banks Initial Coin Offering companies with KYC and anti-money laundering procedures plus Hypothekarbank Lenzburg now charges close to 2,500 Swiss francs to conduct an initial assessment.
The financial regulatory authority in the country, FINMA, is the single entity in charge of tackling this issue. The challenge here is to promote virtual currency innovation in the financial sector while also protecting investors from fraud and avoiding lack of transparency. Switzerland’s current AML regulation governing payment tokens has the potential to hold banks liable for the errors made by ICO issuers in who are based in the country.