Bitcoin investment: Switzerland steps up regulations

bitfinex move to switzerland

Cryptocurrency adoption continues to spread across the world as Switzerland steps up its regulatory approvals for cryptocurrency investment tools. The Swiss Financial Market Supervisory Authority (FINMA) officially announced that it has approved the Crypto Market Index Fund as the first legal cryptocurrency fund, according to official Swiss law.

As per the announcement, this is the first time that FINMA has approved a Swiss fund that focuses primarily on crypto-assets as investment assets. The law marks a step in the direction of greater regulated cryptocurrency adoption in Switzerland. The Swiss financial authority emphasises that the adoptive stance towards cryptocurrency comes in order to direct a smooth transition to include the innovative technology and harness digital assets in the financial ecosystem.

“In order to facilitate serious innovation, FINMA applies the existing provisions of financial market laws in a consistently technology-neutral way, i.e. in keeping with the “same risks, same rules” principle.”

Swiss asset manager Crypto Finance is charged with launching the fund, and it will be administered by PvB Pernet von Ballmoos AG, local investment management firm, and SEBA Bank AG will be in charge of custodial services.

Cryptoassets in Switzerland – to be used safely and securely

The release continued to highlight the importance of using the technology in a way that will aid and not harm the current financial legislation and markets in place.

“In doing so, it makes sure that new technologies are not being used to circumvent the existing rules and that the protective goals of financial market legislation are preserved. Since cryptoassets involve particular risks, FINMA also tied the approval to specific requirements in the present case.”

While this signifies overall adoption, FINMA has emphasised that this fund will be limited to qualified investors who are focused on primarily trading and investing in cryptocurrency and digital assets. FINMA has also offered that this fund will only be listing cryptocurrencies with a large enough trading volume to offer security and legal regulations. The fund will be tracking the performance of the Crypto Market Index 10. On this, Crypto Finance explained:

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.”

In order to achieve regulation and protect investors, FINMA has noted that investors will be required to invest only through established and legal counterparties. This is also o ensure that Anti-Money Laundering (AML) regulations are upheld in cryptocurrency trading and to avoid illicit activity through cryptocurrencies.

Cryptocurrency trading in Switzerland

In September, Switzerland nationals also cleared the path for more digital trading in the country authorising a new cryptocurrency stock exchange. The stock exchange SIX offered that the new division – the SIX Digital Exchange (or SDX) will allow investors trade, settle, store and sell cryptocurrency tokens through regulated institutions. These will be regulated to uphold the highest Swiss standards of oversight.

For years, Switzerland has been seen as a European hub for cryptocurrency development, products, services and markets. The region has been hailed as a Crypto Valley, acting as a hub for cryptocurrency financial companies to reside and operate from. Startups in the industry have been forming in and moving to Switzerland because of the country’s adoptive stance on financial technological advancement. FINMA aims to find a strong balance of innovation in the industry along with market safety and protection and has prioritised working on finding both.

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