Switzerland’s Zug is where the Crypto Valley came into being once. It also hosts a large and thriving community of cryptocurrency companies. The city is a genuine mecca for investors seeking to register a cryptocurrency company in Switzerland.
Though it is not yet the number one jurisdiction in terms of cryptocommunities, Switzerland is one of the most vital destinations in terms of ICO and STO. And the fact that Libra Association has recently been registered in Switzerland is yet another proof of its attractiveness to investors seeking to launch a blockchain business.
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Opening companies dealing in cryptoassets, can be quite a challenge. And especially if you are going to be dealing with blockchain technology in Switzerland.
Despite lacking a proper regulatory framework, Switzerland does have a quite attractive legal framework for establishing cryptocurrency businesses. The country also provides the proper framework for issuing and realizing this kind of assets (on condition that each and every AML provision is abided by).
At the moment, Switzerland is going through the process of adjusting its legal framework with respect to digital tokens. 2019 saw the country’s Parliament initiate consultations on implementing amendments to the corresponding legislation. The idea behind is to tap into the full potential of DLT and put in place a new regulatory framework. Once the DLT bill is voted into law, a new category of permits for platforms dealing in DLT rights will be introduced. To avoid having to put in place a different set of laws, the Swiss Parliament opted for amending the existing legislation.
In its turn, SFMSA (also know as FINMA) has reiterated more than once that it is not going to make any distinction between various technologies utilized for an identical activity. According to it, the ‘similar businesses, similar rules’ principle should be applied to all cryptocurrency companies and startups in Switzerland.
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How Tokens Get Classified
Starting a cryptocurrency company in Switzerland requires in-depth knowledge of Swiss laws. Two years ago, FINMA released a guideline explaining procedure for classifying cryptoassets in accordance with the country’s respective regulations.
FINMA divided tokens into several different categories. Collectively, they are to meet the legal requirements that apply to each of their respective categories.
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Submitting Requests to FINMA
Individuals intending to register a cryptocurrency company in Switzerland are to apply for a permit authorizing such activities in Switzerland.. Given that the field of cryptoassets and digital tokens is quite new, and the regulatory bodies dealing with this issue are constantly evolving, this practice is quite appropriate.
DLT rights can be loosely termed as digitally certified securities, provided they are specifically associated with procedure for registering a DLT. Unlike certificates, they’re prohibited from being utilized or transferred beyond the DL. Therefore, any rights that get issued as certified securities can be deemed as DLT.
As per the DL Bill, issuing DLT rights may take place under these conditions:
- by concluding an agreement between an issuer and holder;
- by registering DLT rights on the DL.
The DL itself is to be in full conformity with the following criteria:
- the operating conditions of the DL and those governing registration must be recorded on the DL or accessible through the DL
- DL operates pursuant to the conditions specified in an agreement on registration, applying the most advanced security processes related of the data recorded on the DL;
- parties should be able to familiarize themselves with the entries on the DL related to DLT rights
Transfering of DLT rights can only be done through tokens on the DL, and more specifically by forwarding them from the sender to the recipient (using a special key). It may only place if the tokens on the recipient’s key of the recipient get registered pursuant to the DL regulations.
It is expected that the DLT Bill will be introducing a whole new type of licenses for platforms dealing in DLT rights in Switzerland. The existing ones (e.g. stock exchanges) may not be utilized for dealing in DLT rights. Therefore, to legalize their cryptocurrency dealings in Switzerland companies are to apply for a corresponding permission. The proposed category of licenses for for platforms dealing in DLT rights will provide a proper legislative framework for platforms dealing in on a non-mandatory basis.
It is worth noting that Swiss regulators are attaching much importance to abidance to laws pertaining to securities and cryptocurrencies. Therefore,starting a cryptocurrency business in Switzerland requires understanding of all legislative acts directly related to this sphere. You can order an individual consultation on cryptocurrencies in Switzerland from IQ Decision UK and learn how to open your crypto business in Switzerland.