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Switzerland sets out guidelines to support initial coin offerings

Switzerland sets out guidelines to support initial coin offerings

ZURICH: Switzerland’s financial supervisor has bucked the trend of global regulators cracking down on cryptocurrencies by announcing guidelines that should help local initial coin offerings, where start-up companies sell digital tokens to investors. The Finma financial authority hopes to support the ICO market and boost blockchain technologies by clarifying when entrepreneurs will have to apply anti-money laundering and securities laws. Regulators around the world have taken an increasingly sceptical view of cryptocurrencies and China and South Korea have banned ICOs. But the Swiss government believes they could offer an economic opportunity.

Johann Schneider-Ammann, economics minister, said last month that Switzerland wanted “to be the crypto nation”. Of the 10 biggest proposed initial coin offerings, four have used Switzerland as a base, according to PwC. More than 100 requests for guidance have been received by Finma. Digital pioneers have been attracted to the affluent Alpine country because it offers a cluster of rich investors and technology specialists, as well as tax and regulatory advantages.

Mark Branson, Finma’s chief executive, said on Friday that the regulator’s “balanced approach“ to ICO projects would allow “legitimate innovators to navigate the regulatory landscape and so launch their projects in a way consistent with our laws protecting investors and the integrity of the financial system.” Finma’s guidelines would increase the number of Swiss ICOs, predicted Oliver Bussmann, president of the Crypto Valley Association in the canton of Zug. “It’s about establishing a sustainable business in Switzerland – and not just about raising capital and moving on,” he said. “If you remove uncertainty, it attracts more business.”

Arnaud Masset, market analyst at Swissquote bank, said the new rule book “definitely sets up Switzerland as a crypto-friendly country and will encourage new crypto-start-ups” Finma’s move is intended to help the fast-growing cryptocurrency industry ahead of a broader review launched last month by the Swiss government, which will also consider possible legislative changes.