Author: Luo Tao, Chief Compliance Counsel block chain Global Compliance Alliance, Tahota (Beijing) Law Firm, service @ gbcuf.com
Switzerland is one of the most friendly countries for encryption technology. Under the premise of compliance with current regulations, cryptocurrency projects can be legally operated here. Switzerland recognizes the potential of blockchain technology and hopes to create an environment suitable for encryption technology innovation. Therefore, as long as there are measures to prevent financial crimes, whether it is an ICO or a cryptocurrency exchange, it will be welcomed. In Switzerland, engaging in cryptocurrency transactions requires obtaining corresponding licenses. Depending on the nature of the project, foreign exchange licenses, bank licenses, financial technology licenses, etc., are all issued by the Swiss Financial Market Supervisory Authority (FINMA).
In Switzerland, FINMA is responsible for the regulation of cryptocurrency and blockchain projects. FINMA has issued guidelines on various encryption projects to help them comply with existing legislation. In 2018, FINMA established a partnership with the Swiss International Finance Agency (SIF) to further refine the supervision of blockchain projects and make changes to existing legislation. In Switzerland, anti-money laundering laws are also an important part of cryptocurrency regulation. It stipulates that persons engaged in asset trading and storage are obliged to understand their customers. If suspicious customers are found, they should report to the Anti-Money Laundering Report Office and freeze the assets of suspicious persons within the scope of the report.
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Swiss regulations on cryptocurrencies are becoming more and more suitable for the development of blockchain projects. It is worth mentioning that the Swiss Zug Canton established the Crypto Valley Association in an effort to make Switzerland the best country for cryptocurrency projects. The Crypto Valley Association has successfully obtained government support and attracted dozens of companies to settle in.
In Switzerland, cryptocurrencies are considered assets and can be legally exchanged and used for various business activities. Everyone can use cryptocurrency, but must obtain the corresponding license. According to the types of activities using cryptocurrency, cryptocurrency licenses will also be different, FINMA can help users determine the type of license required.
In Switzerland, those engaged in professional activities or receiving salary in cryptocurrency are subject to cryptocurrency tax. However, the specific taxation of cryptocurrency projects in Switzerland depends on whether the individual is a professional trader or a private investor, or is a legal entity engaged in cryptocurrency transactions. In general, Switzerland ’s taxation of cryptocurrencies applies to business activities.
Switzerland is one of the most suitable countries for registering cryptocurrency exchanges. Compared with other Swiss cantons, Zug has the lowest taxes. Exchanges need to apply for licenses from FINMA, the most critical of which is compliance with anti-money laundering measures. Swiss-registered exchanges must understand their customers (KYC) and conduct transaction tracking to identify and report any suspicious behavior. However, the license application period is longer, which may be as long as one year.
Swiss ICO regulation is still developing. Currently, ICO is evaluated by FINMA, and different regulations are applied according to the type of token. Payment tokens are regulated by the Anti-Money Laundering Law. Both utility tokens and asset tokens are regarded as securities and need to comply with the Swiss Code of Obligations.