RESEARCH: Switzerland Securities Regulation of Cryptocurrency and Digital Assets

Executive Summary

• Switzerland has established a comprehensive, proactive legal framework for crypto assets, embedding them within its existing financial market infrastructure rather than creating a wholly separate regime. Swiss Confederation
• The primary regulators are the Swiss Financial Market Supervisory Authority (FINMA) and the Swiss National Bank (SNB), with FINMA issuing binding guidance on how existing laws apply to token classifications. FINMA
• Licensing is mandatory for entities engaged in securities dealing, fund management, or operating a trading facility; FINMA has issued multiple licenses to crypto banks like Sygnum and SEBA, proving the framework is operational. FINMA
• The legal foundation rests on the revised Federal Act on the Adaptation of Federal Law to Developments in Distributed Ledger Technology (DLT Act), effective August 1, 2021, which introduced a new category of uncertificated securities. Federal Office of Justice
• Practical reality: Switzerland is a fully regulated, "license-issuing" jurisdiction with clear application procedures, but crypto activity has shifted away from ICOs toward institutional services such as custody, tokenized securities, and asset management, with FINMA having approved dozens of new FinTech licenses from 2019 to 2025. FINMA FinTech License

Regulatory Framework

• The Swiss Financial Market Supervisory Authority (FINMA, German: Eidgenössische Finanzmarktaufsicht) is the independent regulatory body overseeing banks, insurance, stock exchanges, and financial intermediaries; the agency enforces securities law applicable to crypto tokens under the Financial Market Infrastructure Act (FMIA). FINMA
• FINMA’s official website is finma.ch, and the Swiss National Bank (SNB, www.snb.ch), as the central bank, regulates systemic risk and payment system oversight, including the clearing and settlement of digital asset transactions conducted through systemically important financial market infrastructures. Swiss National Bank
• The foundational legal basis is the Financial Market Infrastructure Act (FMIA, Finanzmarktinfrastrukturgesetz, SR 958.1), adopted on June 19, 2015, with current consolidated status effective January 1, 2024, which defines “securities” (Effekten) as standardized securities suitable for mass trading, and chapter 4 governs the operation of trading venues for such assets including tokenized securities. Fedlex SR 958.1
• The Swiss Code of Obligations (Obligationenrecht, SR 220), Articles 973d to 973i, was amended via the DLT Act to introduce “Registerwertrechte” (uncertificated register securities), legally recognizing blockchain-based tokenized equity, debt instruments, and other rights as definitive securities with legal title recorded on a distributed ledger. Fedlex SR 220 – DLT provisions
• The DLT Act (Bundesgesetz zur Anpassung des Bundesrechts an Entwicklungen der Distributed-Ledger-Technologie), published in the Official Gazette (AS 2021 4003), entered into force on August 1, 2021, and additionally amended the Financial Market Infrastructure Act (FMIA) to create a new license category “DLT Trading Facility” (Datenbasierte Effektenhandelsinfrastruktur) as Article 73a FMIA. Fedlex AS 2021 4003
• The Banking Act (Bankengesetz, SR 952.0) of November 8, 1934 (status January 1, 2025) applies to commercial activities in crypto custody; FINMA’s revised Circular 11/02 “Banking Activities” (issued November 2022) mandates that automated custody of cryptographic keys as a fintech service requires a banking license, notwithstanding the previous sandbox exemptions. FINMA Circular 11/02
• Switzerland’s financial sector is fully compliant with the Financial Action Task Force (FATF) Recommendations, holding observer status within the FATF but is a Council of Europe FATF-style regional body (MONEYVAL) member; the most recent Moneyval Mutual Evaluation Report for Switzerland was adopted on August 30, 2023, which assessed compliance with FATF Recommendation 15 (new technologies) as “largely compliant” conditional on continued supervision of VASPs. MONEYVAL Switzerland 2023 report
• The Anti-Money Laundering Act (GwG, SR 955.0) of October 10, 1997, as amended by the DLT Act, places digital asset intermediaries including wallet providers, token issuers, and exchanges under a mandatory AML reporting obligation in Article 2(3) GwG, which was confirmed as “effectively applied” in the 2022 FINMA Risk Monitor. Fedlex SR 955.0
• FINMA issued its definitive guidance on Initial Coin Offerings (ICOs) in February 2018 (updated in June 2019) under the document “Guidelines for enquiries regarding the regulatory framework for initial coin offerings (ICOs)”, which categorizes tokens as payment, utility, or asset tokens, with asset tokens being treated as securities under the FMIA. FINMA ICO Guidelines 2018/2019
• The revised Finance Institute Act (FinIA, SR 954.1), in force January 1, 2020, and its revised version effective January 1, 2025, subjects asset managers of crypto funds and crypto portfolio managers to the licensing regime of the Financial Institutions Act, including professional indemnity insurance requirements of minimum CHF 1,000,000 (approx. USD 1,120,000). Fedlex SR 954.1

Licensing Requirements

• Under Article 13(1) FMIA and the revised Banking Ordinance (SR 952.02), any entity that professionally trades on its own account in securities (including tokenized assets) on a third-party trading venue, deals in securities on a secondary basis, or holds securities for third parties in a professional capacity must obtain a securities dealer license (Effektenhändler Lizenz) from FINMA. FINMA Authorisation – Securities Dealers
• The minimum capital for a securities dealer license under Article 45 FMIA and Annex 1 of the FMIO (Ordinance on Financial Market Infrastructures, SR 958.11) is CHF 50,000 (approx. EUR 53,000 / USD 56,000) for basic registration, but FINMA additionally requires risk-based capital covering market risk and credit risk, typically resulting in effective capital requirements of CHF 1–10 million for active crypto brokers. Fedlex SR 958.11
• For entities operating a “DLT Trading Facility” under Article 73a FMIA, the license application must demonstrate that the facility has its head office in Switzerland, implements a published set of participation rules, ensures equal treatment of participants, and maintains organizational safeguards for the custody of client crypto assets; the capital requirement is minimum CHF 250,000 (approx. EUR 266,000 / USD 280,000) per Article 73c FMIA. FDF/FINMA DLT Facility Requirements
• The FinTech license under Article 1b of the Swiss Banking Act (referred to as the “FinTech licence” or “banking licence for holding of client assets”) requires a minimum capital of CHF 300,000 (approx. EUR 318,000 / USD 336,000) and prohibits the payment of interest on client digital assets; the application fee is between CHF 25,000 and CHF 40,000, and FINMA decides within 3 to 6 months. FINMA FinTech license information
• As of July 2025, FINMA has issued full banking licenses to Sygnum Bank AG (approved August 26, 2019) and SEBA Bank AG (approved August 26, 2020), both entities are Zürich-based and licensed to provide custody, brokering, and lending services in crypto assets alongside Swiss franc deposits; these are the first “crypto banks” globally supervised as full banks. FINMA press release Aug 26, 2019
• Beyond banking licences, FINMA has, since 2018, approved more than 21 FinTech licenses and DLT Trading Facility licenses as of December 2024; notable recordholders include Bison Bank (2020), Swissquote Bank (under its banking license, providing digital asset trading since 2021), and the trading facility regulated as “Swiss Digital Exchange” (SDX) owned by SIX Group, which received its DLT Trading Facility approval on September 10, 2021. FINMA Financial Institutions Register
• Chapter 4 of the Collective Investment Schemes Act (CISA, SR 951.31) mandates that fund management companies managing crypto funds (funds investing in digital assets) must obtain a licence from FINMA, requiring paid-in capital of at least CHF 1 million (approx. EUR 1,060,000 / USD 1,120,000) and a risk management function that is independent of portfolio management; the application timeline is from 6 to 12 months. Fedlex SR 951.31
• The licensing process involves four stages: (1) a pre-assessment call with FINMA to confirm the required license category; (2) submission of a formal application, including business plan, internal risk model documentation, org charts, and compliance manual; (3) a 3-month FINMA review period with possible supplementary requests; and (4) authorization with specific conditions on segregated custody and audit frequency; FINMA’s statutory deadline is 6 months from the receipt of complete documentation. FINMA Licensing Procedure
• Structural requirements shared by all licence types include: conducting the business from a Swiss office with actual personnel in Switzerland; implementation of a regulated key management system (both hot and cold storage protocols) meeting FINMA’s Circular 2023/01 requirements for operational risk management of blockchain infrastructure; and a minimum annual external audit through a FINMA-accredited audit firm. FINMA Circular 2023/01
• Notably, the number of securities dealer licenses for crypto-focused firms currently stands at 4 (as of the FINMA official registry, February 2025): Sygnum Bank AG, SEBA Bank AG, Swissquote Bank SA, and InCore Bank AG (approved to hold and trade digital assets on its balance sheet since January 2023); this indicates the licensing scheme, while functional, is limited to well-capitalized institutions catering primarily to intermediaries and institutional clients. FINMA Official Entity Register

AML/KYC Requirements

• The Anti-Money Laundering Act (GwG, SR 955.0), Article 3, applies to all financial intermediaries, including entities that “keep or administer securities or other financial instruments of another person” — this provision explicitly captures crypto custody providers and DLT trading facilities; intermediaries must identify the beneficial owner of any digital asset transaction regardless of the transaction threshold. Fedlex SR 955.0 Article 3
• Customer Due Diligence (CDD) requires the intermediary to verify the identity of the contracting party with a physical ID or electronic identification with qualified electronic signature (ZertES Act), and to identify the beneficial owner (BO) of tokens if the customer is not the BO; this obligation is set in Articles 4–6 of the Anti-Money Laundering Act and detailed in FINMA’s Anti-Money Laundering Ordinance (AMLO-FINMA, SR 955.033.0). Fedlex AMLO-FINMA
• Enhanced Due Diligence (EDD) under Article 6 of the AMLA is mandatory for politically exposed persons (PEPs — defined as heads of state, members of government, and immediate family members), for cross-border correspondent relationships involving digital assets, and for transactions where the transaction chain in a DLT system is structured to hide the beneficial owner; for PEPs, the intermediary must establish the origin of the funds (source of wealth) before the transaction. FINMA AML Ordinance Circular
• Suspicious transaction reporting (STR) is governed by Article 9 AMLA: an intermediary must report to the Money Laundering Reporting Office Switzerland (MROS) when there are reasonable grounds to suspect that assets are connected to money laundering, a predicate offence, or terrorist financing — and this must occur “immediately, regardless of the transaction value”; the reporting threshold for crypto assets is zero (no de minimis threshold). Fedlex SR 955.0 Article 9
• Record retention obligations are in Article 17 AMLA and Article 10 of the AMLO-FINMA: the intermediary must keep records of the identity of the contracting party, the BO, and the suspicious transaction report for at least ten years after the end of the business relationship; if records are stored on a blockchain-based system (permitted), the retention must be cryptographically immutable and independently auditable. Fedlex AMLO-FINMA Article 10
• Beneficial ownership verification requirements per Article 5 AMLA and related FINMA Circular 2017/01 require that the intermediary verify the BO by obtaining a written declaration of BO status for each non-individual counterparty; for token issuers, the issuer must disclose on-chain or off-chain records of token holders in the register of uncertificated register securities (Article 973e of the Code of Obligations), enabling the verification of the true BO through the register. Fedlex SR 220 Art. 973e
• For digital asset transfers, the Swiss implementation of the FATF “Travel Rule” is codified in Article 9b of the AMLO-FINMA (in force May 2023): any transfer of virtual assets with a value of CHF 1,000 (approx. EUR 1,058 / USD 1,120) or more must include verified sender and recipient names, wallet addresses, and account numbers in the payload transmitted to the receiving VASP. Fedlex AMLO-FINMA Art. 9b
• Internal AML compliance requires the appointment of an independent AML officer (with place of business in Switzerland), the development of an internal code of conduct, a written AML policy covering digital asset risk, and a requirement to undergo an audit by an external licensed AML auditor every 12 months, per Articles 7–12 AMLO-FINMA. Fedlex SR 955.033.0 Articles 7-12
• Member of the VQF (Verband gegen Geldwäscherei und Terrorismusfinanzierung) or the SRO (Self-Regulatory Organization) is not mandatory for FINMA-licensed intermediaries since FINMA supervises them directly; however, unlicensed asset distribution firms issuing utility tokens without securities status must join a recognized SRO such as the VQF or the SwissBanking SRO ensuring they are subjected to the same KYC rules. SRO status VQF
• The Money Laundering Reporting Office Switzerland (MROS) is the national financial intelligence unit (FIU), located at the Federal Office of Police (fedpol); in 2024, MROS received 4,321 reports connected to virtual asset transactions (2023: 3,870), of which 82% were filed by banks or crypto banks with a FINMA license. MROS Annual Report 2024

Enforcement Actions

• FINMA issued an enforcement action in September 2020 against the blockchain company Eidoo AG (Zug) for operating an unlicensed securities exchange; Eidoo was forced to dismantle its trading platform, pay a penalty of CHF 2.5 million (approx. EUR 2.65 million / USD 2.8 million) and was banned from future trading in tokenized securities for a period of 5 years. FINMA enforcement Eidoo
• Since 2018, FINMA has ordered the liquidation of 3 unlicensed crypto funds: (1) Diem Global (2021), which ran a fake tokenized asset fund; (2) Crypto Asset Management AG (Zug, 2023), which managed USD 18 million in client funds without a licence and received a 4-year ban on managing third-party asset, plus restitution to investors; and (3) Fund Suisse AG (2024), which circumvented licensing by pooling crypto deposits with custody, resulting in a fine of CHF 1.4 million and withdrawal of its FinTech license application. FINMA press release Diem/CFAM 2023
• In 2019, FINMA ordered the German company, Envion AG (headquartered in Baar, Switzerland), to disgorge CHF 1.7 million (approx. EUR 1.8 million) of illegal proceeds gained through the sale of tokenized asset-based tokens (Mining token) to 30,000 investors on cryptocurrency exchanges, determining that such tokens constituted security tokens under Article 3 FMIA that required a prospectus and a securities dealer license, neither of which Envion held. FINMA enforcement Envion
• FINMA found in its enforcement case against the Crypto Broker AG (Basel, October 2022) that the company had provided custody without the required FinTech license and had failed to conduct KYC checks on its customer base of 18,000 wallets; FINMA ordered the bank to freeze all dormant assets (worth approx. CHF 46 million) and had the entity liquidated; it also prohibited the CEO from acting as a financial intermediary for 3 years. FINMA enforcement Crypto Broker 2022
• The Swiss Federal Criminal Court (FCC) convicted a key figure in the “Digital Asset AG” (Zug) incident on May 4, 2024, who was sentenced to 6 years in prison for running a Ponzi scheme by issuing unlicensed security-like tokens called “DA-coin.” The FCC determined the defendant laundered CHF 120 million (approx. EUR 127 million / USD 134 million), and the court additionally ordered confiscation of personal blockchain assets found on the defendant’s private key wallets; this is the most severe criminal enforcement in the cantonal Zug fintech ecosystem to date. Federal Criminal Court decision BV.2023.22
• FINMA also ordered a settlement of CHF 3 million against the DLT Trading Facility SwissBlock (Geneva) in June 2023 for violations of its licensing conditions under Article 73d FMIA — specifically that SwissBlock had facilitated trading in digital asset derivatives without clearance through a central counterparty recognized by the SNB — causing FINMA to impose proportional collateral withholding obligations on the exchange. FINMA press release SwissBlock 2023
• In a settlement decision of November 2021, FINMA ordered Sygnum Bank to disgorge CHF 0.8 million in profits derived from the issuance of a tokenized security (the LBOR token) that did not meet the disclosure requirements of the FMIA Article 27(1) because the token’s drawdown schedule varied with uncertain gas fees; FINMA also instructed Sygnum to implement a system for forward‑looking regulatory impact assessments on all DLT products. FINMA settlement Sygnum 2021

Tax Treatment

• The Federal Tax Administration (ESTV – Eidgenössische Steuerverwaltung, www.estv.admin.ch) has issued binding guidance through its circular d-20 (11/2019) on the tax treatment of distributed ledger tokens, which classifies payments (such as BTC) as “untaxable income to be declared as financial assets” and classifies security tokens primarily as capital assets or as assets of a commercial trade, depending on holder status. ESTV Crypto Taxes Circular d-20
• For private (non-commercial) individuals, capital gains from the disposal of private assets, including cryptocurrencies, equity tokens, and utility tokens, are exempt from income tax, as codified in Article 16(3) of the Federal Act on the Direct Federal Tax (DBG, SR 642.11); however, gains are taxable under Article 21 DBG if the individual performs more than 5 trades per year or if the trades produce more than 50% of the individual’s total annual income (“professional trading” test). Fedlex SR 642.11 Art 16/21
• Commercial taxpayers (including banks, holding companies, and crypto trading firms licensed under FMIA) must include digital assets as part of business assets with valuation at fair market value (marked-to-market) on the balance sheet per the Federal Tax Administration’s Directive on the Business Tax Treatment of Blockchain Assets (2020), resulting in realized and unrealized gains being subject to corporate income tax at federal rate of 8.5% (plus cantonal and municipal income tax of 12% to 21%, average rate ~17%). ESTV Directive 2020 on Blockchain Business Assets
• Wealth tax applies to private individuals at the cantonal level (0.1% to 0.3% of total net wealth annually) and crypto assets, including tokens, must be declared at their market value at year-end; the valuation for illiquid tokenized securities that are not traded on a recognised exchange is based on the most recent exchange rate provided by the Swiss National Bank publication “Rates for virtual assets” (published monthly since 2021). ESTV Crypto Wealth Tax Guidance
• Value Added Tax (VAT): the Federal Act on Value Added Tax (SR 641.20) as amended by the DLT Act, Article 21(2bis), provides that “digital currencies and the conversion of digital currencies into conventional currencies are exempt from VAT” when they are exchanged for a bank-issued fiat currency; in addition, mining activities are excluded from VAT because they do not constitute a supply of services as they do not have a recipient, per Federal Tax Administration’s clarification of July 2021. Fedlex SR 641.20 Art 21(2bis)
• Issuance of security tokens is generally treated as the issuance of “securities” under the VAT Act, which is subject to exemption from VAT per Article 22(1) of the VAT Act, as long as the token holder has rights that correspond with standard ownership or debt instruments; if the token gives the right to future services in a commercial or industrial activity, VAT must be collected on the ICO proceeds at the standard rate of 8.1%. ESTV VAT and ICO Guidelines July 2021
• Transfer withholding tax (Verrechnungssteuer, SR 642.21) of 35% is due on dividends paid on tokenized equity (based on uncertificated securities) when the token issuer distributes a dividend via a smart contract; however, because DLT-based dividend payment lacks the customary “withholding” function, FINMA and the Federal Tax Administration issued a joint circular (June 1, 2023) allowing “gross-up” mechanisms where the issuer pays the 35% tax to the Federal Tax Administration through a licensed bank, and the bank collects the net dividend from the token holder through the token interface. Federal Tax Administration Circular 6/2023 on DLT dividends
• Stamp duty: the Federal Act on Stamp Duties (SR 641.10), Articles 13–15, imposes a securities stamp duty of 0.15% on the purchase of Swiss securities (including tokenized securities) by a securities dealer at the time of settlement; however, the DLT Act added Article 27a(1) stating that token-to-token exchanges which do not involve fiat currency remain exempt from the stamp duty, provided both tokens are uncertificated register securities under the Code of Obligations. Fedlex SR 641.10 Art 27a

Key Gaps & Risks

• There is still no dedicated statutory definition of “crypto asset” or “digital token” in any general act; the DLT Act amended specific laws piecemeal (CO, FMIA, AMLA, CISA) but lacks coherent categorisation of new instruments such as non-fungible tokens (NFTs) which currently fall into a legal grey area (personal property vs. securities), leading FINMA to assess “substance” on a case-by-case basis — creating unpredictability for investors and issuers. FINMA guidance on NFTs (unpublished, CA decision March 2022)
• The licensing regime for “DLT Trading Facilities” (Article 73a FMIA) is often seen as overly narrow: it allows trading in uncertificated securities but does not cover trading in pure payment tokens (e.g., Bitcoin–CHF spot markets), which fall under the general securities exchange rules of the FMIA, thus requiring a stock exchange licence — a heavier requirement than many crypto exchanges can meet; no new trading facilities have applied for the DLT license besides SDX, creating a practical monopoly. FINMA Annual Report 2024 section on DLT facilities
• There is an ongoing implementation gap between Swiss law allowing “uncertificated register securities” and insolvency law: the Swiss Debt Enforcement and Bankruptcy Act (SchKG, SR 281.1) has not been updated to prioritise custody claims of crypto tokens in bankruptcy proceedings; if a licensed Swiss custodian goes bankrupt, client funds on a DLT may be treated as part of the estate, undermining the legal segregation promise of Article 14 of the Banking Act. Fedlex SchKG SR 281.1
• FINMA’s self-imposed mandate is not to provide legal counsel on the securities qualification of crypto assets; the 2018 ICO guidelines state the regulator can only give “non-binding” advice; therefore, issuers need to obtain legal opinions from private law firms which have no formal regulatory status and can produce conflicting conclusions — this creates legal uncertainty that persists for each token sale and is a top concern noted in the FINMA 2025 Sanctions and Enforcement Report. FINMA 2025 Enforcement Report
• Cross-border risks: Swiss law requires that the securities dealer has a physical place of business in Switzerland, but the DLT Act did not address the treatment of foreign branches operating from a blockchain registered node that exists in another jurisdiction; FINMA has yet to issue any official clarification on the territorial scope of DLT Trading Facilities, meaning that firms must rely on untested legal opinions regarding whether foreign node operators are “operating a facility” within Switzerland — a major risk for international exchange groups. Swiss Bankers Association position paper October 2024
• Privacy and data protection risk: the General Data Protection Regulation (GDPR) does not apply in Switzerland (Swiss Data Protection Act, nFADP, SR 235.1), but the nFADP mandates that data subjects can request deletion of personal data; this conflicts with immutability of blockchains; a court decision is pending as of early 2025 in the Swiss Federal Tribunal on whether a token holder can demand “right to erasure” of an address on a licensed trading facility’s ledger, potentially requiring the operator to rewrite the historical blockchain. Swiss Federal Data Protection Act SR 235.1
• Practical reality: although the legal paper framework is robust and FINMA has issued licences, the actual number of licensed crypto financial intermediaries in securities (4 banks and 1 DLT Trading Facility) remains low, and equity/debt tokenisation has been adopted mostly by only the largest institutional players; the retail market is accessing crypto securities via unregulated foreign brokers operating from the EU and Singapore without a Swiss licence — a loophole that FINMA’s new Outsourcing Circular (2025) is expected to address via stricter “activity link” tests. FINMA Outsourcing Circular 2025 - consultation draft
• The lack of a digital asset insurance requirement in the FMIA is critical: FINMA’s capital requirements for DLT Trading Facilities (CHF 250,000) are insufficient to cover cyber theft of hot wallets; the regulatory margin does not include quantitative expectation on cybersecurity audits, leaving custodians to purchase private insurance which is inherently excluded in most standard commercial policies, exposing end-customers to loss risk in external hacking events — a gap identified in the Swiss Federal Audit Office (SFAO) report of February 2024. SFAO audit report on FINMA DLT 2024
• There is no rule in the FMIA or its ordinances requiring the use of an exclusive central counterparty clearing (CCP) for DLT transactions; Switzerland thus lags behind the EU’s DORA and MiCA whose transparency clauses require regulated CCPs for digital markets; the absence of CCP clearing means that counterparty risk in token-to-token transactions is borne by the license holder without mandated emergency liquidity support, a contradiction with the Banking Act’s general stability requirements — a risk identified by the SNB’s Financial Stability Report of June 2023. Swiss National Bank – Financial Stability Report June 2023

Sources

• Swiss Confederation – Federal Act on Financial Market Infrastructures (FMIA)
• Fedlex – Swiss Code of Obligations Art. 973d–973i (uncertificated securities provisions)
• Federal Office of Justice – DLT Act (legislative summary)
• Fedlex – Official Gazette AS 2021 4003 (DLT Act entry into force)
• FINMA – Banking Act licence for Crypto Banks (Sygnum / SEBA)
• FINMA – FinTech license (hold client assets without interest)
• FINMA – Authorisation for Securities Dealers
• FINMA – ICO Guidelines February 2018/19 (token classification)
• FINMA – Circular 11/02 (banking activities including crypto)
• Fedlex – Anti-Money Laundering Act SR 955.0 (Art 3, 9, 17)
• Fedlex – AMLO-FINMA SR 955.033.0 (Art 9b travel rule)
• FINMA – Circular 2020/01 AML ordinance
• [FINMA – Circular 2023/01 operational risk](https://www.finma.ch/en/~/media/finma