Understanding Digital Asset Business in Switzerland
Explore how to invest and trade with cryptocurrencies and digital securities in Switzerland under the Swiss Financial Market Regulations. Learn about Switzerland's approach to cryptocurrencies, legal background, financial licenses, and business cases in this informative webinar by NEUPERT VUILLE PARTNERS. Discover the positive attitude of Swiss regulators towards cryptocurrencies, the legal framework for blockchain, different types of tokens, financial licenses required, and key considerations for conducting ICOs in Switzerland.
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NEUPERT VUILLE PARTNERS Doing Business with Digital Assets in Switzerland How to invest and trade with cryptocurrencies and digital securities under Swiss Financial Market Regulations Swiss Russian Chamber of Commerce Webinar 25 November 2020 1
NEUPERT VUILLE PARTNERS Agenda 1. Switzerland's Approach to Cryptocurrencies 2. Legal Background 3. Financial Licences in Switzerland 4. Business Cases 2
NEUPERT VUILLE PARTNERS 1. Switzerland's Approach to Cryptocurrencies Swiss government and regulator (FINMA) have a very positive attitude towards cryptocurrencies. Crypto Valley in Zug. But cryptocurrencies is no legal tender (money) in Switzerland. Legal framework for blockchain is being drafted. DLT-Act effective as of August 2021. Current legal framework provides for adequate regulations, in particular the banking act, anti-money laundering regulations and the act for financial services. Case-by-case assessment by FINMA: no-action letter 3
NEUPERT VUILLE PARTNERS 2. Legal Background No specific rules for ICO/TGE/DLT FINMA ICO Guidelines: Payment tokens (pure cryptocurrencies) are token used as means of payment for acquiring goods or services or money transfer (Bitcoin, Ethereum). Utility tokens: provide access digitally to services Asset tokens: represent assets such as a debt or equity claim against the issuer: share in future company earnings or physical assets to be traded on a blockchain infrastructure. Economic function is similar to equities, bonds or derivatives. 4
NEUPERT VUILLE PARTNERS 3. Financial Licences Banking Licence: deposits from the public, lending, interest Securities Dealer Licence: creating and trading with securities tokens Trading Platform Licence (organized trading facilities): platform for multilateral trading in financial instruments (not Bitcoins) Fintech Licence: deposits from the public (CHF 100m max.), but no interest/no lending Sandbox: no more than CHF 1m deposits from the public Financial intermediary non-banking sector: application with a self-regulatory organisation (SRO) to ensure compliance with AML 5
NEUPERT VUILLE PARTNERS 4. Business Cases ICO "Real" cryptocurreny based on blockain technology No obligation from the issuer to repay accepted funds otherwise "deposits", i.e. banking licence needed (included in whitepaper) Application of anti-money laundry regulations (know-your- customer/beneficial owner) Prospectus requirements may be triggered 6
NEUPERT VUILLE PARTNERS 4. Business Cases Trading with Bitcoin Sale and purchase of cryptocurrencies for its own account: no licences needed. Same for mining Exchange of BTC: no banking licence needed, but AML applies SRO membership (money exchange, money transmitting, exemption settlement accounts); Bitcoin ATM Acceptance of fiat-currency or cryptocurrency for future purchase: banking licence 7
NEUPERT VUILLE PARTNERS 4. Business Cases Banking in Switzerland / Investments in Digital Assets Banking industry traditionally risk averse sector. Reluctant to be involved with crypto. Paradigm shift in the last two years; first licenced crypto banks; private banking accpeting assets originating from BTC. Investment in digital assets similar like any other private equity investment. No reporting duties. No border restrictions. 8
NEUPERT VUILLE PARTNERS 4. Business Cases Setup of a Swiss stock corporation (Aktiengesellschaft) Preferred option for Russian investors to do business in Switzerland Swiss stock corporation is a company divided by shares. Paid-in capital of minimum CHF 100'000.-. The capital is not blocked and can be used for business purposes. (Sole) Russian shareholder possible as well as Russian board members. 1 Swiss resident director is needed. Board members are disclosed in commercial register, but no information on shareholders is publicly available. 9
NEUPERT VUILLE PARTNERS Contact Dr. Andr Terlinden, LL.M, attorney-at-law Neupert Vuille Partners Dufourstrasse 58 CH-8702 Zollikon, Switzerland terlinden@nplaw.ch +41 44 396 80 80 www.nplaw.ch 10
