FINMA Updates AML Guidelines for Crypto Exchange Transactions
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FINMA Updates AML Guidelines for Crypto Exchange Transactions

February 8, 2020      Tarulika Jain

FINMA, supervisory Authority of Swiss Financial Market came up with new Anti Money Laundering (AML) guidelines to combat tax evasion and money laundering activities. The ordinance is primarily related to regulating the transactions of cryptocurrency exchanges.

New AML Guidelines of FINMA

Governments all over the world are striving to implement strict capital controls, including the proper verification process. Now, pro-crypto Switzerland is also implementing the procedures to safeguard the transaction process.

The new ordinance of FINMA aims to regulate the documentation process related to portfolio managers as well as trustees of collective assets. The process will include the calculation of the de minimis threshold for gaining authorisation as a portfolio manager. The ordinance will also aim for risk management of collective assets. FINMA clarifies that there will be amendments of current circulars and abolishment of redundant circulars to ensure improved regulations.

The new process will revise the limits of threshold values related to the client identification process for the transaction in exchanges. The limit is changed from CHF 5,000 to CHF 1000 (Swiss franc). FINMA intends to implement the international standards that were approved in 2019 and also endorse the problems related to money laundering risks associated with transactions in cryptocurrencies.

Redefining Financial Architecture

To redefine financial architecture, Swiss government added the Financial Services Act (FinSA) and Financial Institutions Act (FinIA) which came into force from January 1, 2020. Both the Acts incorporates the regulations for uniform competitive conditions and boost client protection. The newly proposed Acts obligates the Swiss Financial Market Advisory Authority (FINMA) to pass the implementations related to the technical issues of the transactions. Therefore, FINMA presented the ordinance for the improved regulations in the market.

Regulations: Positive or Negative for the Swiss Market

Some of the countries experienced the shutting down or relocating of a number of businesses after the stringent regulations passed by authorities. The Swiss crypto market has the risk to lose customers after the ordinance of FINMA. The Crypto Valley of Switzerland is an abode of over 800 business due to the crypto-friendly regulations of the government. But it would be too soon to predict the attitude of business as up to the date Switzerland remains a magnet for crypto companies. 

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Tarulika Jain
Tarulika Jain

Tarulika is an engineering graduate and an eloquent crypto blogger. Being a digital economy supporter, she keeps herself updated with the latest innovation in the crypto industry, Blockchain Technology, Internet of Things and other technologies. Currently, she curates the simple and interesting content for Crypto guides for beginners. If you want to learn more about the cryptocurrencies, latest trends of blockchain-powered AI applications, you are free to follow her on LinkedIn and Twitter.