Swiss Financial Authority To Take Steps To Curb Money Laundering

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  • Swiss Financial Market Supervisory Authority (FINMA) has revealed its intentions to pass new rules with respect to countering money laundering.
  • The New Financial Service Act (FinSA) and the Financial Institutions Act (FinIA) came into force on January 1st, 2020.
  • The most significant change which the regulators are looking for is to lower the threshold value for crypto exchange transactions.

As the crypto market struggles to distance itself from the infamous reputation of being a platform for crime and money laundering, and the Swiss Financial Market Supervisory Authority (FINMA) has revealed its intentions to pass new rules with respect to countering money laundering. That will affect cryptocurrency transactions in the country.

The New Financial Service Act (FinSA) and the Financial Institutions Act (FinIA) came into force on January 1st, 2020. This also included Federal Council approved ordinances, namely Financial Services Ordinance (FinSO), Financial Institutions Ordinance (FinIO), and Supervisory Organisations Ordinance (SOO).

These new laws have led FINMA to implement provisions pertaining to several technical issues according to the changes in regulations.

FINMA has thus announced the creation of an updated Financial Institution Ordinance along with amendments to the current circulars issued by FINMA. The supervisory authority is looking to hold public consultations on the new regulations until April 9th, 2020.

The most significant change which the regulators are looking for is to lower the threshold value for crypto exchange transactions. The FINMA proposes an amendment in its Anti-Money Laundering Ordinance (AMLO-FINMA), where it looks to change the client identification threshold values from CHF 5000 to CHF 1000.

This move will lead FINMA to implement the international standard (as declared in mid-2019) in managing the heightened money laundering risks in the crypto industry.

This intention of the Swiss Financial Market Supervisory Authority is in line with the skeptical statements made by the nation’s Federal Council regarding the use of cryptocurrency and crypto exchanges.

In fact, in December 2019, the Federal Council approved examining the opportunities and risks of the crypto franc, which is also called e-franc. The council then announced that they do not think Switzerland at present will extract any additional benefits from universally accessible central bank currency.

Further, it was also concluded that technology would create new risks and hamper the financial stability of the nation.

The analysis conducted for the report further explained that the central bank digital currency could have far-reaching repercussions, which can vary based on how it is designed. It concluded that better solutions could be developed in the concerned areas.

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