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Switzerland expands AML regulations around crypto

Tuesday 8 November 2022 14:12 CET | News

The Swiss Financial Market Supervisory Authority (FINMA) has issued an anti-money laundering (AML) ordinance that enforces identity checks for reporting certain cryptocurrency transactions.

 

According to Cointelegraph, through a notice issued on 2 November 2022, the Switzerland financial regulator stated that it would initiate a threshold of 1,000 Swiss francs for transactions of virtual currencies to cash or other forms of payment. FINMA data indicated that the regulator made adjustments on the basis of the country’s AntI Money Laundering Act and its government’s Anti-Money Laundering Ordinance. 

FINMA officials explained that they received numerous responses concerning the specification of the threshold for transactions with virtual currencies. In view of the risks and recent instances of abuse, FINMA stands by the rule that technical measures are needed to prevent the threshold of CHF 1000 from being exceeded for linked transactions within thirty days.

Cointelegraph reportedly has noted that FINMA enforces a reporting threshold for unidentified digital currency transactions from CHF 5,000 (USD 4,944) to 1,000 (USD 988) in January 2020, with regard to reported increase in cryptocurrency-based money-laundering regulations. It is believed that FINMA will increase the adjusted ordinance and regulations, which are expected to go into effect in January 2023.

 

The Swiss Financial Market Supervisory Authority (FINMA) has an anti-money laundering (AML) ordinance which needs identity checks for reporting certain cryptocurrency transactions.

 

FATF and EU AML efforts concerning cryptocurrency

Financial Action Task Force updates

In October 2021, the Financial Action Task Force (FATF) updated its 2019 Guidance for a Risk-Based Approach for Virtual Assets and Virtual Asset Service Providers (VASPs). The FATF standards require countries to assess and mitigate their risks associated with virtual asset financial activities and providers; license or register providers and subject them to supervision or monitoring by competent national authorities. VASPs are subject to the same relevant FATF measures that apply to financial institutions.

At the time, it was underlined that guidance on how the FATF Standards apply to stablecoins.

More recently, in November 2022, The FATF has issued a new set of recommendations for EU states on how to handle AML and terrorist financing threats. Some areas that required a re-calculation of their risk levels included the online gambling sector, as well as crypto assets. 

European Union and AMLD6

Regulation concerning how cryptocurrencies must be handled in the context of fighting money laundering has been the topic of discussion at a EU level this summer, with the announcement from the Union that it wants to create a sixth Anti-Money Laundering Authority that will be specifically tasked with regulating the cryptocurrency industry.

While the Markets in Crypto Assets regulation and the contentious Transfer of Funds Regulation have received most of the attention from the cryptocurrency industry, they are only a small part of a larger package of EU anti-money laundering (AML) policy that will have significant effects on all financial institutions.

The European Council, European Commission, and Parliament are creating a new regulatory body for cryptocurrencies that will have authority over the sector. The new authority will be called AMLD6 and will have direct control over the cryptocurrency sector.

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Keywords: regulation, AML, AMLD6, money laundering, cryptocurrency
Categories: Fraud & Financial Crime
Companies: FINMA
Countries: Switzerland
This article is part of category

Fraud & Financial Crime

FINMA

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