Once called “Crypto Nation”, Switzerland is currently driving away the cryptocurrency ecosystem due to its stringent and strict regulatory network. However, the Swiss government is making some serious reformations in its regulatory system to reinvent itself as the cryptocurrency hotbed of the world.
As reported by The NewsBTC, the publishing of ICO guidelines in February 2018 has resulted in several crypto enthusiasts and firms leaving Switzerland to offshore rival countries such as Gibraltar, Liechtenstein, the British Virgin Islands, and the Cayman Islands.
Popular cryptocurrency expert Erik Voorhees had felt that the regulations brought to put a hold on money laundering and other illegal cases were “pretty reasonable”. The regulations had classified token into three different types, “Payment”, “Utility”, and “Asset”.
However, the reality begs to differ from Voorhees’ opinion. In the past year, Switzerland has dropped its ranking from 2nd place in 2017 to 6th place in 2018 in a PwC country ranking of the sum of initial coin offering (ICO) funds raised. The fact is that an ample of cryptocurrency entrepreneurs seem to be losing their interest in establishing themselves in the country.
The cryptocurrency ecosystem in Switzerland has taken various steps to retain the interest of the entrepreneurs and have also requested the central bank, Swiss National Bank (SNB), to relieve them from the hardships of opening bank accounts since the new legislation.
The key challenge is to encourage cryptocurrency innovation within the financial system and at the same time also protect the investors from fraud and lack of transparency. The current AML regulation on payment tokens may possibly encompass banks liable for the mistakes made by the ICO issuers based in Switzerland.
In May 2018, Swiss Bankers Association (SBA) had prepared a set of checks and conditions that would allow the banks to open an account for cryptocurrency firms in order to overcome their apprehensions over ICO fraud or money laundering. The meeting was held with an aim to have new FINMA-approved guidelines for cryptocurrency companies by year-end 2018.