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Regulation

Swiss regulator calls for stricter crypto reporting rules

Switzerland’s financial watchdog wants to lower the transaction reporting threshold for cryptocurrency exchanges from $5,000 to $1,000

The Swiss Financial Market Supervisory Authority, or FINMA, said Friday that it will propose an ordinance for stricter anti-money laundering laws for cryptocurrency businesses.

The proposal calls for reducing the threshold for reporting crypto transactions from the current limit of 5,000 Swiss Francs (roughly $5,120) to 1,000 Swiss francs (roughly $1,025).

That means that cryptocurrency businesses, including exchanges, custodians and hedge funds, will be required to collect “know your customer” information about anyone initiating transactions of over $1,000, as well as details about recipients of funds.

The proposal will bring the threshold in line with those set by the Financial Action Task Force in mid-2019 as part of an upgrade to existing guidance. A Paris-based international body set up in 1989, the FATF creates policies to combat money laundering and the financing of terrorism. It is followed by about 200 countries, including the U.S. The body originally issued its “Guidance of Risk-Based Approach to Cryptocurrencies,” following the famed Mt. Gox heist in June 2015. 

By implementing this new rule, the Swiss regulator said is acknowledging the “heightened” AML risks in the cryptocurrency space. FINMA also said it will hold consultation on the newly proposed limit through April 9, so that anyone can comment. 

Marcel Hostettler, partner at Swiss law firm MME and former FINMA employee, believes the move is a positive one for crypto businesses. It “gives more credibility/safety to Swiss jurisdiction when FATF rules are being implemented,” he told Modern Consensus.  

Still, the FINMA initiative is only a small slice of what is happening in AML regulation across the globe. The European Union recently implemented it 5th Anti Money Laundering Directive, or AMLD5, which requires crypto exchanges to register with their local regulator and comply with enhanced KYC/AML reporting obligations.

Last month, the FATF hosted a summit for regulators of virtual asset service providers—or VASPs, as it likes to call cryptocurrency exchanges—to begin the process of discussing best practices and coming up with common issues to be addressed in implementing AMLD5 regulations.



Amy Castor has more than 20 years' experience in journalism. Her work on crypto and blockchain has appeared in consumer and trade publications throughout the U.S., including CoinDesk, Forbes, Bitcoin Magazine, and The Block.

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