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FINMA releases anti-money laundering rules to blockchain providers

Tuesday 27 August 2019 11:55 CET | News

The Swiss Financial Market Supervisory Authority (FINMA) has published guidance on how it applies anti-money laundering rules to financial services providers in the area of blockchain tech.

In its guidance, FINMA provides information about this technology-neutral application of the regulation to payment transactions on the blockchain. Institutions supervised by FINMA are only permitted to send cryptocurrencies or other tokens to external wallets belonging to their own customers whose identity has already been verified and are only allowed to receive cryptocurrencies or tokens from such customers.

As a result, similar with traditional bank transfers, information about the client and the beneficiary must be transmitted with transfers of tokens (with the exception of transfers from and to unregulated wallet providers). Only then, for example, can the provider receiving this information check the name of the sender against sanction lists or check that the information provided about the beneficiary is correct.

FINMA-supervised institutions are thus not permitted to receive tokens from customers of other institutions or to send tokens to such customers. This practice applies as long as information about the sender and recipient cannot be transmitted reliably in the respective payment system. Unlike the Financial Action Task Force (FATF) standard, this established practice applies in Switzerland without the exception for unregulated wallets and is therefore one of the most stringent in the world.

Moreover, the Swiss Regulator has also issued banking and securities dealers’ licences to SEBA Crypto registered in Zug and Sygnum registered in Zurich, which will offer services for institutional and professional customers.


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Keywords: money laundering, financial crime, blockchain, anonymity, Swiss Financial Market Supervisory Authority, FINMA, Switzerland
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Countries: World