Crypto regulation in Switzerland - state of play

Switzerland is one of the most crypto-friendly jurisdictions in the world, which provides specific requirements to establish a crypto business there. According to data from September 2021, over 960 blockchain and cryptocurrency business are located in the country.[1]

In Switzerland the government’s general attitude towards cryptocurrencies and in particular towards the technology underlying cryptocurrencies is very positive and that’s why this country is of the leading locations in area of distributed ledger technology (DLT) and blockchain technologies. Therefore, the current attitude of the government and of the regulators to the use of crypto-assets in their jurisdiction is a very clear – the representatives of the Swiss federal government have publicly stated that Switzerland intends to become a leading hub for research and business solutions based on blockchain technology. For this reason, for example the Swiss Agency for Innovation Promotion is even funding a four-year programme of the Swiss Blockchain Federation to generate ideas and start-ups in the Swiss blockchain industry. Crypto-regulatory initiatives also exist at the cantonal level – for example Zurich has published a special guide to determine in which cases the use of blockchain technology may be beneficial for the certification. If this sounds interesting, this article is for you


According to Swiss law, cryptocurrencies do not have the legal status of a currency or money. The term „cryptocurrency” or „virtual currency” also does not have a legal definition. The Swiss federal government had to address the topic of virtual currencies in a special report published on 25 June 2014. According to this document, a virtual currency is a digital representation of a value which can be traded on the Internet and although it takes on the role of money – it can be used as means of payment for real goods and services – it is not accepted as legal tender anywhere. Virtual currencies exist only as a digital code and therefore do not have a physical counterpart for example in the form of coins or notes. Given their tradability, virtual currencies should be classified as an asset. In other words, in Switzerland crypto and virtual currencies are classified as assets or property.

What is more, cryptocurrency exchanges and Virtual Asset Service Providers are legal, as long as they are licenced and regulated by FINMA. Wherein, the regulatory body strictly advises all exchanges to perform Enhanced Due Diligence in accordance with the country’s AML/CFT framework.


The Swiss Financial Market Supervisory Authority (FINMA) plays a key role in shaping the cryptocurrency legal environment in Switzerland, which is independent financial-markets regulator. We can definitely say that FINMA has been one of the most proactive regulators on crypto assets. Its mandate is to supervise banks, insurance companies, financial institutions, collective investment schemes, and their asset managers and fund management companies. It is charged with protecting creditors, investors and policyholders. FINMA seems to be one of the most proactive regulators on crypto assets – as proven, for example, the creation of a special fintech desk to address the needs of start-up companies and other players in that space.

Regulation of cryptocurrency and blockchain projects is also done by FINMA. It publishes guidelines for various kinds of crypto projects, which are of interest to parties wishing to submit their project for review by FINMA. „Guidelines for enquiries regarding the regulatory framework for initial coin offering” (ICOs) published on February 2018 are listed as one of the most important. Due to the fact that there is currently no generally recognised terminology for the classification of tokens either in Switzerland or internationally, FINMA in mentioned ICOs categorises tokens into three types:

  • payment tokens – are synonymous with cryptocurrencies and have no further functions or links to other development projects. Tokens may in some cases only develop the necessary functionality and become accepted as a means of payment over a period of time;
  • utility tokens – are tokens which are intended to provide digital access to an application or service;
  • and asset tokens – represent assets such as participations in real physical underlying assets, companies, or earnings streams, or an entitlement to dividends or interest payments. In terms of their economic function, the tokens are analogous to equities, bonds or derivatives.

Hybrid forms of tokens from above are possible. With regard to tokens, the interesting thing is the position of the Federal Council (DLT report published on 14 December 2018) in which authority takes the general position that tokens cannot represent rights in rem in a legally effective way in lieu of possession. However, where rights in rem are exercised through indirect possession combined with a contractual agreement between the party with direct possession and the owner, a representation of such rights in a blockchain token or other decentralised register entry is considered legally feasible by the Federal Council.

In relations to this issue, in September 2021 FINMA issued the first ever approval for the stock exchange and the central securities depository for token trading[2] – two approvals were issued to operate financial market infrastructures based on DLT. SIX Digital Exchange AG has been authorised to act as central depository and SDX Trading AG as stock exchange. The services of SDX Trading AG are exclusively addressed to supervised financial institutions. This is the first time that a licence has been issued in the Swiss financial centre for infrastructures that facilitate the trading of digital securities in the form of tokens and their integrated settlement. At the same time, FINMA reminds that DLT can be approved in one of two ways. First, in the traditional form of approval as a stock exchange or central securities depository as per the Financial Market Infrastructure Act (FMIA). This presupposes that the corresponding offering will only be open to supervised financial institutions. Alternatively, trading in DLT securities can now be approved on the basis of the DLT act. An approval to operate a DLT trading facility allows organisations to obtain a single licence for the trading and settlement of DLT securities. Furthermore, in this case it is also possible to offer the service to end clients, as long as the corresponding additional requirements – e.g. provisions on combating money-laundering and the relevant provisions of the Financial Services Act – are complied with.

All cryptocurrency exchanges must obtain a license from FINMA, as well as register as either a Swiss AG (Public limited company) or GMBH (Limited liability company) company. Entities interested in obtain a license must fulfil, inter alia, the following requirements: registration as a company in Switzerland, an appropriate organizational structure, carry out AML requirements, good reputation for both the organization and those responsible for it, ability to assure proper business conduct or ability to keep track of transactions, identify and report anything suspicious.

Among the other guidelines of the authority FINMA guidance regarding payments on the blockchain dated 26 August 2019 and sheet on virtual currencies on 1 January 2020 should also be mentioned.

Additionally, this authority publishes an annual FINMA report and FINMA enforcement report being sources of indirect guidance in that the provide an overview of FINMA’s activities in the area of blockchain financial services. Similar reports are issued by the Swiss government.


On 27 November 2019, the Federal Council proposed new rules for digital assets and submitted the dispatch on the draft Federal Act on the Adaptation of Federal Law to Developments in Distributed Ledger Technology (DLT Bill) to the Swiss Parliament, to reflect the technological developments and improve the regulatory framework for distributed ledger technology (DLT). In September 2020, the Swiss Parliament adopted the DLT Bill. Some parts of the legislation came into force in February 2021 and the remainder of the new provisions came into force in August 2021. Instead of creating a comprehensive new act on DLT, Swiss lawmakers opted to amend existing regulations to accommodate business models relying on the new technology. Moreover, the aforementioned law act adapts various federal laws.

Other provisions of the DLT Bill include changes to the following legal acts: Financial Services Act, the National Bank Act, the Banking Act, the Financial Institutions Act, the Anti-Money Laundering Act, the Financial Market Infrastructure Act and Dept Enforcement and Bankruptcy Act.

One of the novelties introduced by the DLT Law is a new form of uncertificated securities, called DLT securities. The aforementioned paperless security can “document” everything what a security can document, such as the ownership right to goods, gold or shares and claims. It must therefore also be entered in an uncertificated securities book. The registered uncertificated security can neither be transferred nor asserted off the register by express agreement of the parties involved. First of all, DLT securities have to be registered in a DLT protocol and can only be executed and transferred within this protocol. The holder of the registered uncertificated security must have the power of disposal over the register entries or his tokens, the integrity of the uncertificated securities register must be protected against unauthorised changes by appropriate technical and organisational measures, the registered uncertificated security is preceded by an agreement between the parties that the registered uncertificated security can only be transferred and asserted via the uncertificated securities register and the token holder must always be able to view and check the information and  register entries relating to them without the intervention of a third party.

Another of the novelties introduced by the DLT Law is modifications of the Anti-Money Laundering law. It should be noted that Swiss AML regulation covers the Swiss Anti-Money Laundering Act (AMLA) and the Anti-Money Laundering Ordinance (AMLO). The catalogue of activities for payment services is expanded in the AMLO. The scope of the AMLA has been updated to cover the DLT trading facility, which will be considered a financial intermediary subject to the AML rules and the scope of the law’s applicability in regard to the provision of virtual currency payment services has been extended. What is more, FINMA updated its AML regulation in September 2021 which lowered the threshold for which businesses are mandated to verify the identity of their clients during Bitcoin trades and other cryptocurrency transactions. The new threshold has been set to 1,000 Swiss francs ($1,082) per month.

The next change introduced by the DLT Law is a new licence type for DLT Trading Facilities – the DLT trading facility. Previously there was three licensing categories for trading platforms: the stock exchange, the multilateral trading facility and the organised trading facility. The new DLT trading facility is a one-stop-shop for the trading, custody and settlement of digitized assets. DLT trading facilities are permitted to operate a facility for multilateral trading of DLT securities:

  • whose purpose is the simultaneous exchange of bids between several participants and the conclusion of contracts based on non-discretionary rules and which either admits participants in accordance with Article 73c para. 1 let. e FINMA („retail customers”);
  • holds DLT securities in central custody based on uniform rules and procedures;
  • or clears and settles transactions in DLT securities based on uniform rules and procedures.

At least one of these three conditions must be satisfied to trigger a licensing requirement as a DLT trading facility. The DLT trading facility must be structured as a legal entity under Swiss law and have its registered office and head office in Switzerland. Deemed a financial intermediary, DLT trading facilities are to be supervised directly by FINMA for AML compliance. If the DLT trading facility also provides central custody, clearing or settlement services, it is deemed to be systemically important. The requirements for obtaining an authorisation as a DLT trading facility are similar to those for obtaining an authorisation as a stock exchange or a multilateral trading facility. Any change to the basis on which the licence was granted must be reported to FINMA. In the event of material changes, approval must be obtained from FINMA before continuing with operations. A DLT trading facility may not begin operations until a licence has been granted by FINMA. It is an offence to engage in activities which require a licence without being in possession of said licence.

This extension of potential participants to retail customers is expected to lead to a partial disintermediation of banks, as customers can trade DLT securities themselves and, unlike in the current system, are no longer obligated to trade shares and other financial instruments exclusively via their bank or broker.


The Swiss Financial Market Supervisory Authority FINMA has approved the first crypto fund according to Swiss law. The fund invests primarily in crypto assets. Crypto assets are based on the blockchain or distributed ledger technology. The fund concerned goes by the name of the „Crypto Market Index Fund”, an investment fund according to Swiss law belonging to the category „other funds for alternative investments” with particular risks. FINMA applies the existing provisions of the financial market law in a consistently technologically neutral manner in relation to crypto-funds. The fund may only invest in established crypto assets with a sufficiently large trading volume. Distribution of this fund is restricted to qualified investors and all activities by the fund must be executed via „established counterparties and platforms that are based in a member country of the Financial Action Force – the intergovernmental agency set up to combat money laundering. There are also specific requirements with regard to risk management and reporting for the institutions involved in the management and custody.[3] Qualified investors, such as Swiss wealth management banks, asset managers, pension funds, and other professional investors, who collectively manage several trillion CHF in assets, have been waiting for this kind of regulated fund. The aforementioned investment fund tracks the performance of the Crypto Market Index 10, which is administered by the SIX Swiss Exchange. The objective of the Crypto Market Index 10 is to reliably measure the performance of the largest, liquid crypto assets and tokens and to provide an investable benchmark for this asset class.

Crypto Finance is the first, and the only, FINMA-regulated asset manager in Switzerland for crypto asset funds. Crypto Finance has set itself the goal of crypto asset management with quality and security comparable with investment products in traditional markets and leveraging its digital asset experience as a fund manager to develop its portfolio of regulated, secure institutional crypto asset investment instruments.[4] It must be emphasized that crypto fund is a result of a close cooperation for the custody provided by the Swiss crypto bank – SEBA Bank. Founded in mid-2018 as an advocate of next-generation digital banking, the firm soon rose to prominence as a pioneer in the regulated digital asset sector. One year later in August 2019, the bank attained its banking and securities firm license and introduced their SEBA wallet app, e-banking service and SEBA card to the market, supporting five major cryptocurrencies including Bitcoin and Ethereum.[5]According to the official statement of the bank: „SEBA is a licensed and supervised Swiss bank providing a seamless, secure and easy-to-use bridge between digital and traditional assets. Secure, trade and manage crypto currencies, digital assets and conventional securities all in one place”.[6] The bank’s CEO, Guido Buehler, says: “Two years ago SEBA Bank received a Swiss banking and securities firm licence and is now enjoying excellent business momentum as institutional adoption of crypto & digital assets accelerates globally.[7]

What is more, SEBA Bank is also involved in raising capital in the form of tokens. The entity mentioned above expanded its offering with a total nine crypto currencies from 3 May 2021. The expanded array of coins and tokens is also available across SEBA Bank’s investment solutions, including tailor-made and actively managed client portfolios in the framework of individualized discretionary mandates.

The activities described above may contribute to the increased location of foreign capital in the Swiss crypto market, especially considering that the Swiss entities related to crypto and DLT infrastructure mentioned that cryptocurrency assets are getting popular also among the country’s wealth management firms and private banks. Switzerland started early on to follow the developments in the market and address the topics which are relevant from a regulatory point of view – thanks of that has a strong foundation for the stable regulation of digital currencies. The open attitude of the national legislator and supervisory authorities, innovative legal solutions or the granting of the first license to a cryptocurrency fund are just a few examples of factors encouraging to invest capital in the crypto industry in Switzerland. Without a doubt, with a modern, rapidly developing cryptocurrency infrastructure and a friendly supervisor promoting this segment the crypto market’s attention (including ours) is now sharply focused on Switzerland. 








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