The Swiss Financial Market Supervisory Authority FINMA published guidance on the application of Swiss anti-money laundering, or AML, rules to the financial services providers it supervises in the area of blockchain technology. FINMA also issued, for the first time, banking and securities dealer licenses to two pure-play blockchain service providers: SEBA Crypto AG registered in Zug and Sygnum AG registered in Zurich. The practice set out in this guidance applies in full to the supervision of these two new institutions.
FINMA emphasizes that blockchain-based business models cannot be allowed to circumvent the existing regulatory framework. This applies particularly to the rules for combating money laundering and terrorist financing, where the inherent anonymity of blockchain technology presents increased risks. The published guidance on virtual asset service providers deals with blockchain service providers such as exchanges, wallet providers, and trading platforms. It requires that the existing rules on combating money laundering also apply to such service providers. In its guidance, FINMA provides information about this technology-neutral application of the regulation to payment transactions on the blockchain.
Institutions supervised by FINMA are only permitted to send crypto-currencies or other tokens to external wallets belonging to their own customers whose identity has already been verified and are only allowed to receive crypto-currencies or tokens from such customers. FINMA-supervised institutions are thus not permitted to receive tokens from customers of other institutions or to send tokens to such customers. This practice applies as long as information about the sender and recipient cannot be transmitted reliably in the respective payment system. Unlike the FATF standard, this established practice applies in Switzerland without the exception for unregulated wallets and is, therefore, one of the most stringent in the world.
Keywords: Europe, Switzerland, Banking, Securities, Crypto-Assets, AML, Blockchain, Fintech, PMI, Bank Licenses, FINMA
Previous ArticleOSFI Revises Capital Requirements for Operational Risk for Banks
EU published Directive 2021/338, which amends the Markets in Financial Instruments Directive (MiFID) II and the Capital Requirements Directives (CRD 4 and 5) to facilitate recovery from the COVID-19 crisis.
The Standing Committee of the European Free Trade Association (EFTA) recommended that a systemic risk buffer level of 4.5% for domestic exposures can be considered appropriate for addressing the identified systemic risks to the stability of the financial system in Norway.
In a recent statement, PRA clarified its approach to the application of certain EU regulatory technical standards and EBA guidelines on standardized and internal ratings-based approaches to credit risk, following the end of the Brexit transition.
In a recently published letter addressed to the G20 finance ministers and central bank governors, the FSB Chair Randal K. Quarles has set out the key FSB priorities for 2021.
EU published, in the Official Journal of the European Union, a corrigendum to the revised Capital Requirements Regulation (CRR2 or Regulation 2019/876).
ESAs published a joint supervisory statement on the effective and consistent application and on national supervision of the regulation on sustainability-related disclosures in the financial services sector (SFDR).
EC published a public consultation on the review of crisis management and deposit insurance frameworks in EU.
HKMA announced that enhancements will be made to the Special 100% Loan Guarantee of the SME Financing Guarantee Scheme (SFGS) and the application period will be extended to December 31, 2021.
EBA launched consultations on the regulatory and implementing technical standards on cooperation and information exchange between competent authorities involved in prudential supervision of investment firms.
BoE issued a letter to the CEOs of eight major UK banks that are in scope of the first Resolvability Assessment Framework (RAF) reporting and disclosure cycle.