The regulation of virtual currencies in Switzerland - read in the blog of the company COREDO

The regulation of virtual currencies in Switzerland

Updated: 03.06.2020

The Crypto Valley in Zug, Switzerland is a home for the enormous community of digital currency companies and attracts even more of investors who desire to register a new company specialized on cryptocurrencies in Switzerland.
Libra Association has recently registered in Switzerland which proves the desirability of this country for investors to launch a new blockchain. Although, Switzerland’s jurisdiction for cryptocurrencies is not leading yet, it is already one of the most actively used destinations for ICO and STO.
In case you are planning on opening a digital currency company in Switzerland, we will provide you with all information and advice needed.

Starting with legal aspects

Opening a cryptocurrency firm in Switzerland can be fairly challenging, not that it is not complicated in general in other countries.
Even though there is no regulatory framework, Switzerland offers an appealing system of legal requirements for starting a virtual currency company. The proper outline is also provided for releasing virtual assets, only if AML conditions are applied on all of them.
Right now, the legal framework of Switzerland is adjusting to incorporate digital tokens. The Swiss Parliament organized consultations on applying improvements to the cryptolegislation in order to utilize the full potential of DLT and issue a new legislative outline. It was decided to amend the existing legislation of Swiss instead of forming a new set of regulations. And once the DLT bill is voted into law, there will be a new class of permits for platforms working with DLR rights.

The classification of tokens

FINMA released a framework describing the cryptoassets classification that conforms to the Swiss laws. In case one is planning to launch a virtual currency company in Switzerland, the knowledge of these guidelines may truly come in handy. According to FINMA, there are several categories of tokens. Overall, they should meet the legal requirements applicable to their respective categories.
Our advisors in COREDO will give you the expert advice and the newest information about trading in payment tokens or applying for the authorization permitting operations with virtual currencies. Contact us if you are about to open a cryptocurrency company in Switzerland!

Submission of requests to FINMA

If one is planning on registering a digital currency company in Switzerland, they are supposed to apply for a permit to conduct such activities in Switzerland. After considering the whole newness of the cryptocurrency scene and the evolving legislative regulations and organizations, the approach seems suitable.

Distributed Ledger Technology (DLT) Bill

Since the DLT rights are specifically related to the process of registering a DLT, they can be considered digitally certified securities. Being different from certificates, they are not allowed to be used or transferred outside the DL. This brings us to the conclusion, that any rights releases as certified securities can be viewed as DLT.
These are the conditions to issue DLT rights:

  • To close a holder-issuer agreement;
  • To register DLT rights on the DL.

Meanwhile the DL must be complying to these standards:

  • The DL’s operating conditions and the conditions of the ones governing the registration are to be recorded on the DL or available through the DL;
  • The DL follows the conditions of an agreement on registration, implementing the security procedures of the most advanced type regarding the data recorded on the DL;
  • Parties are supposed to have an opportunity to learn about the entries on the DL in relation to DLT rights.

The transfers of DLT rights can only be carried out via tokens on the DL, specifically saying through transferring them from the sender to the recipient while using a special key. The procedure can be done exclusively if the tokens on the recipient’s key become authorized according to the DL regulations.
A completely new kind of licenses for platforms working with DLT rights are to be introduced as a result of the DLT Bill. The ones existing already like stock exchanges might not be used in the future for dealing with DLT rights. So, in case they would like to legalize their dealings on virtual currencies, in Switzerland companies would be requested to receive a permission for that business. The introduced category of licenses is about to provide a proper regulation system for the platforms dealing with DLT rights on a non-mandatory basis.
The launching of a cryptocurrency company in Switzerland implies the need of decent knowledge about the laws regulating this field, since the compliance with these regulations is thoroughly inspected by the Swiss officials. Our mission in COREDO is to help you familiarize with the key aspects of running a digital currency business in Switzerland.


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