On-shore VASP in Switzerland

FINMA is Switzerland's integrated financial market supervisor (FINMASA Art. 6): it licenses banks, FinTech licence holders, securities firms and DLT trading facilities, supervises AML compliance, and issued the ICO Guidelines (2018) and the stablecoin guidance (06/2024).

Financial intermediaries under AMLA Art. 2(3) without a FINMA licence, the usual route for smaller crypto businesses, must join one of the 10 FINMA-recognised self-regulatory organisations (AMLA Art. 14(1)), which include VQF, SO-FIT, AOOS, PolyReg and ARIF.

The DLT Act (Federal Act of 25 September 2020 on the Adaptation of Federal Law to Developments in Distributed Ledger Technology, AS 2021 33) amends ten federal acts, introducing ledger-based securities, DLT trading facilities and the segregation of crypto-based assets in bankruptcy; it entered into force on 1 February and 1 August 2021.

The Anti-Money Laundering Act of 10 October 1997 (AMLA/GwG, SR 955.0) sets identification, due-diligence and suspicious-activity reporting duties for financial intermediaries, including crypto service providers; the travel rule itself rests on AMLO-FINMA Art. 10 as applied by FINMA Guidance 02/2019.

The Financial Institutions Act of 15 June 2018 (FinIA, SR 954.1), in force since 1 January 2020, licenses portfolio managers, trustees, managers of collective assets, fund management companies and securities firms (Art. 2(1)).

The Banking Act of 8 November 1934 (BA, SR 952.0) governs banking and FinTech licences, while the separate Financial Market Infrastructure Act of 19 June 2015 (FMIA) governs DLT trading facilities; the former securities dealer licence is now the securities firm licence under the Financial Institutions Act (FinIA Art. 41).

Switzerland has no single crypto or VASP licence: by activity, firms need SRO membership under AMLA Art. 14, a FinTech licence (deposits up to CHF 100 million, minimum capital at least CHF 300,000), a banking licence (minimum capital CHF 10 million), a securities-firm licence (FinIA Art. 41) or a DLT trading facility licence (FMIA Art. 73a).

Crypto-based assets that a bank or securities firm undertakes to hold available for a custody client, and that are attributable individually or by a clear co-ownership share, are treated as custody assets segregated from the bankruptcy estate (BankG Art. 16 no. 1bis, inserted by the DLT Act, in force 1 Aug 2021); FINMA Guidance 01/2026 (12 Jan 2026) covers custody risks.

Crypto exchange activity in Switzerland falls under existing licences by function: SRO membership under AMLA Art. 14 for financial intermediation only, a banking or FinTech licence for client deposits, a FinIA securities-firm licence for trading securities for clients, or a DLT trading facility licence under FMIA Art. 73a.

FINMA applies financial market law in a technology-neutral way, focusing on the economic function and purpose of a token ('substance over form') and following the principle 'same risks, same rules' (FINMA releases of 26 Aug 2019 and 11 Sep 2019).

Depending on the activity, a crypto project may need a FINMA banking licence or FinTech licence (BankG Arts. 3, 1b), a securities-firm licence (FinIA Art. 41) or a DLT trading facility licence (FMIA Art. 73a); since FinIA took effect on 1 Jan 2020 there is no securities dealer licence.

FINMA supervises AML compliance of banks, FinTech licence holders, securities firms and other Art. 2(2) AMLA intermediaries; crypto businesses that are financial intermediaries only under AMLA Art. 2(3) are supervised by a FINMA-recognised self-regulatory organisation they must join (AMLA Arts. 12, 14). Swiss law has no separate VASP category.

The Anti-Money Laundering Act (AMLA/GwG, SR 955.0, of 10 October 1997) imposes identification, beneficial-owner, documentation and reporting duties (Arts. 3-9) on financial intermediaries, including crypto service providers that professionally accept, hold or help transfer third-party assets (Art. 2(3)); such non-bank intermediaries must join a recognised self-regulatory organisation (Art. 14), while banks and other Art. 2(2) institutions are supervised for AML by FINMA (Art. 12).

On 12 November 2020 FINMA announced an amendment to its Anti-Money Laundering Ordinance lowering the client identification threshold for cryptocurrency exchange transactions from CHF 5,000 to CHF 1,000; the rule (AMLO-FINMA Art. 51a) has applied since 1 January 2021.

Swiss financial intermediaries must identify the contracting party when one virtual-currency transaction, or several that appear linked, reach or exceed CHF 1,000 (AMLO-FINMA Art. 51a(1)); for cash or other anonymous payments, technical measures must prevent linked transactions exceeding that threshold within 30 days (Art. 51a(1bis)); transfers to external wallets require proof of the customer's ownership by suitable technical means (FINMA Guidance 02/2019).

AMLA Art. 6 requires financial intermediaries to clarify the background and purpose of a transaction or business relationship that appears unusual or carries increased risk; relationships with foreign politically exposed persons and their close associates always count as increased-risk (Art. 6(3)), and the frequency of controls follows the client's risk (Art. 6(1)).

Swiss financial intermediaries, including crypto service providers, must verify the identity of the contracting party from a document of evidentiary value when opening a business relationship (AMLA Art. 3(1)) and establish the beneficial owner (AMLA Art. 4).

AMLA Art. 8 requires financial intermediaries to take the organisational measures needed to prevent money laundering and terrorist financing, in particular adequate staff training and controls; AMLO-FINMA Art. 20 requires effective monitoring of business relationships and transactions, with an IT-based monitoring system for banks and securities firms.

Financial intermediaries must keep the records of transactions and AML clarifications, including client identification and beneficial-owner documents, for at least ten years after the business relationship ends or the transaction is completed (AMLA Art. 7(3)).

Swiss financial intermediaries must periodically review client documentation for currency and update it as needed, with frequency, scope and type set by the client's risk (AMLA Art. 7(1bis)); the duty applies equally to FINMA-supervised and SRO-affiliated intermediaries, including crypto service providers.

FINMA (Swiss Financial Market Supervisory Authority, FINMASA Art. 5) supervises banks, securities firms and other institutions under the financial market acts, issues guidance such as the ICO Guidelines of 16 February 2018 on token classification, and supervises AML compliance of Art. 2(2) intermediaries directly; non-bank intermediaries are supervised for AML by recognised SROs (AMLA Art. 12).

The Money Laundering Reporting Office Switzerland (MROS), run by the Federal Office of Police (fedpol), receives and analyses the suspicious activity reports that financial intermediaries, including blockchain service providers, must file under AMLA Art. 9 (AMLA Art. 23).

Switzerland applies the travel rule to crypto transfers via AMLO-FINMA Art. 10 as interpreted in FINMA Guidance 02/2019 (26 August 2019), with no minimum threshold; the CHF 1,000 figure is the AMLO-FINMA Art. 51a client-identification threshold for virtual-currency transactions.

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Gains on crypto held as private assets are in principle tax-free capital gains (losses not deductible), but depending on the type, scale and financing of the transactions they can be reclassified as taxable self-employment income (ESTV working paper, 14 December 2021).

Whether a crypto trader is a private investor or self-employed depends on the type, scale and financing of transactions; the ESTV working paper (14 December 2021) applies by analogy the criteria of ESTV Circular No. 36 of 27 July 2012 on professional securities trading.

Where crypto trading qualifies as self-employment by type, scale and financing, gains are taxable income rather than tax-free private capital gains, and losses are deductible if booked (ESTV working paper, 14 December 2021).

Payment tokens are subject to cantonal wealth tax and must be declared at market value at the end of the tax period; ESTV publishes tax values for the most common cryptocurrencies in its price list (Kursliste) (ESTV working paper, 14 December 2021).