In a sector where overseeing and tracking investments and transactions is not well received, FATF’s new rules from June stirred quite the panic. Only two months after, the Swiss financial watchdog already adhered to the guidelines and released a document giving regulatory advice to blockchain companies.
Adhering to FATF’s (Financial Action Task Force) new rules concerning the digital assets sector released in June this year, the Swiss FINMA (Financial Market Supervisory Authority) issued their own guidance. The document, released earlier today, provides regulatory advice to all services that offer payments via blockchain and fall under FINMA’s supervision.
Blockchain companies categorized as VASPs (Virtual Asset Service Provider) under Swiss laws, include cryptocurrency exchanges, trading services, and wallet providers. FINMA reminds the public that all blockchain companies must follow the preexisting regulatory framework, including current KYC and AML laws.
The financial watchdog notes that the given guidance must be viewed in a ‘technology-neutral way,’ making the point that all financial blockchain-based services must follow the same practices as traditional banks. If a VASP were to transfer tokens between two clients, it would need to provide information similar to a bank transaction, and additionally warn authorities if any suspicious activity is involved. Furthermore, all information about the transactions with bitcoin and co. can also be transferred through other means of communication and not just blockchain.
However, while the Swiss financial authority follows FATF’s newly released standards, it refuses to exclude transactions from unregulated wallet providers. Accepting payments from unregulated services would make them more favorable and would prevent regulated services from denying problematic transactions.
Moreover, FINMA complains about the lack of a clear and concise system, whether domestic or international, that transfers identification information via blockchain-based transactions in a safe way. If such a system were to be created in the future, it should only be applied to VASPs that are under AML supervision.