Swiss Watchdog FINMA Mandates AML Policies on Crypto

Switzerland Tightens Rules for Crypto Providers: Switzerland’s regulator is covertly imposing more stringent anti-money laundering rules on crypto platforms and brokers, https://t.co/llsROIkzAu has learned. The move is in response to international… https://t.co/llu6dl4Ppr

— finews.ch (@finews_ch) September 23, 2021

Switzerland has been the target of numerous money-laundering scandals in recent months, including two corruption scandals – the Venezuelan PDVSA and 1MDB. The country is also looking to make serious amendments in its 24-year law to address some of the vulnerabilities that have allowed money laundering activities to thrive.

Digital assets such as cryptocurrencies seem to pose an additional risk of money laundering, with FINMA recently dismissing the banking licence of Bitcoin Suisse, a crypto broker, due to concerns over money laundering. In particular, FINMA considered the money laundering defence mechanisms of Bitcoin Suisse as having indications of weaknesses.

The regulation regarding 1000 Swiss Francs amount was passed after consultation with industry players. However, the monthly constraint has raised alarms as industry business models are likely to be affected.

Currently, 85,000 crypto service providers operate from Switzerland and numerous Swiss banks are accepting cryptocurrency payments, including SEBA bank and BBVA. The new FINMA regulation seeks to clamp down the use of crypto ATMs, which, according to FINMA, drug dealers are using as their primary payment system. The country has 130 Bitcoin ATMs, with Zurich and Lausanne leading the way with 38 and 20 respectively.

Suggested Read: Anti-Money Laundering Compliance for Crypto Exchanges [2021 Update]