‘Relaxed’ Swiss license allows fintech startups to accept public deposits

The Swiss financial regulator has issued fresh guidelines for fintech startups, giving leeway to licensees to accept up to CHF100 million ($100.1 million) in public deposits, in a radical move designed to boost innovation in the sector.

The move comes as part of the new Banking Act, which has been designed in part to create more favourable conditions for fintech businesses, including expanding the options for crowd-lending models within a regulatory sandbox environment.

The guidelines are part of a wider strategy of supporting the crypto sector by the Federal Council of the Swiss Financial Market Supervisory Authority, which aims to boost Switzerland’s profile as a global destination for crypto and fintech startups.

Crucially, the new guidelines give crypto businesses the ability to accept deposits from the public without the need for the same authorisations as a bank, enabling them to explore innovative models without the full range of compliance expectations.

According to a statement from FINMA, which will oversee firms in the regulatory sandbox and is responsible for issuing the new licenses, the measures will begin to come into effect at the turn of the year. It explained, “With the new measure, companies with special authorisation can accept public funds of up to CHF100 million from 1 January 2019, provided they neither invest nor pay interest on these funds.”

The statement goes on to reference amendments to the Bank Ordinance (BankO), which will come into force in April 2019, noting, “In the BankO, the sandbox will additionally be extended to include crowdlending business models, whereby public funds up to a total amount of CHF1 million can one day be brokered not only for commercial and industrial purposes but also for private consumption.”

The fintech license is aimed at startups looking to explore models of taking deposits, without investing or paying interest on those deposits.

The policy is designed to help cement the reputation of Switzerland and the city of Zug as a haven for cryptocurrency innovation, with an already established and booming crypto sector in the country.  

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Unauthorized ICO lands crypto mining firm in hot water with Swiss court

Cryptocurrency mining firm Envion AG was reportedly shut down in Switzerland over allegations that it conducted an unauthorized initial coin offering (ICO). On Wednesday, German news outlet Handelsblatt Global reported that the Cantonal court of Zug ordered the company’s liquidation, noting that the Swiss firm lacked any auditing function or board.

Established by Michael Luckow and Matthias Woestmann, Envion is an off-grid mining company that boasts of using decentralized, clean energy such as solar and hydroelectric to power its mobile mining units. The Swiss company held an ICO in early 2018, raising around $100 million.

Luckow accused his partner of taking control of the majority of Envion shares shortly after the company held its crowdsale. Meanwhile, Woestmann claimed Luckow illegally generated another 40 million of Envion’s native tokens (EVN) without the knowledge of the board of directors. This, according to Woestmann, was in addition to the 86 million tokens that were initially agreed on.

In July, the Swiss Financial Market Supervisory Authority (FINMA) launched a probe into Envion’s ICO and found that the company accepted some 100 million francs (worth $100.01 million at the time) from 30,000 investors. The company reportedly gave investors the EVN tokens “in a bond-like form.”

According to reports, FINMA was investigating “possible breaches of banking law resulting from the potentially unauthorized acceptance of public deposits” during the token sale.

Since the dispute between the two, Luckow has been fighting for the firm in a bid to save the original concept. In a Medium post, Envion stated, “The founding team now faces the challenge of responding to fallacious allegations as they make their case against Woestmann. Though Woestmann can produce no evidence supporting his allegations, envion’s founders have begun a campaign to publish the necessary proof to allow investors to determine the truth based on verifiable documentation.”

Financial supervisors have already appointed an investigator to ensure the liquidation process is “unavoidable.”

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Switzerland clamps down on banks trading in crypto: report

The situation in Switzerland got a whole lot more difficult for cryptocurrency and banking in general, as the Swiss Financial Market Supervisory Authority (FINMA) is getting tough on those banks who want to trade in crypto assets.

On Monday, Swissinfo.ch  reported that the financial regulator has described its stance on how financial institutions should weigh crypto assets.

In a letter to EXPERTsuisse, a copy of which was obtained by the Swiss news outlet, FINMA noted that banks and securities dealers should assign “a flat risk weight of 800% to cover market and credit risks” against crypto assets. This means that with the current BTC price of $6,000, institutions would have to value the coin at no less than $48,000 as a buffer level. EXPERTsuisse is a group representing Swiss trustees and accountants.

The guidance is on the high end of the range and on the level of hedge funds, according to the report, meaning FINMA considers crypto assets to be volatile.

Swissinfo.ch reported that FINMA has also set the crypto-trading cap at 4% of a bank’s total capital, noting that banks must report to the authority if they reach that upper limit.

While the letter offers insight into the regulator’s stance and outreach on this issue, it hasn’t yet released official rules for how Swiss banks should deal with cryptocurrencies under the Basel III international banking regulations, according to the report. The financial regulator has already issued an official guidance for initial coin offerings (ICOs) in February, after it received a number of enquiries on the matter.

At the time, FINMA said the applicability of regulation to cryptos would be determined on a case-by-case basis—a stance that is similar to the one taken by the U.S. Securities and Exchange Commission (SEC) in July.

According to FINMA, “asset tokens” fall under securities, meaning there are securities and civil law requirements for trading such tokens. It noted, “FINMA regards asset tokens as securities, which means that there are securities law requirements for trading in such tokens, as well as civil law requirements under the Swiss Code of Obligations.”

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The fourth edition of Block Hedge Business 2018 at Zurich is set to create ripples in the blockchain world

After putting together a series of successful blockchain conferences in the eastern part of the globe, Block Hedge is all set to unite leading stakeholders in the crypto sphere of the western world at Zurich in Switzerland.

Switzerland, as we know is one of the most prominent blockchain and cryptocurrency centers on account of its favorable business environment, regulations and tax rates. It is home to few of the most prominent crypto powerhouses, which is why it has been attracting the sizeable attention of all those involved in the field.

In light of its business friendly environment, blockchain entrepreneurs, key industry individuals, businessmen, top government officials and blockchain enthusiasts have been valuing the region to expand their blockchain technology led business.

To amplify the manifestation possibilities of their growth aspiration, Block-Hedge has been carefully designed as the perfect avenue to bring all together for an insightful day long event on 7th December, 2018 at Zurich.

The conference is scheduled to take place at Swissotel, with an agenda that is going to be bundled with meaningful takeaways for all those who attend.

The guiding philosophy behind the event is to discover the future and amplify the growth of the most powerful and disruptive technology in the present time.

The entire focus of the spectrum of talks and panel discussion is to bring focus on the practical aspect of blockchain and cryptocurrencies and what it means for driving business results. The networking opportunities as a part of it are sure to be extremely meaningful, with the backing of a plush gathering of blockchain business stakeholders, investors and the media.

Some of the noteworthy speakers who are going to grace the event with their experience backed sessions include:

  • Jose Alejandro-Co-founder- Bitcoin Gold
  • Tania Balzli-Head of Banking and Crypto- PwC
  • Andrew Rippon- CEO – Thrupny
  • Nithin Eapen – Chief Investment Officer – Arcadia Crypto Ventures
  • Alessandro Raffelini – Group Chief Financial and Technology Officer – TDA Capital London
  • Mauro Andriotto – Founder – Andriotto Financial Services
  • On Yavin – Founder and CEO – Cointelligence

The expected count of the attendees, going exactly by the significant traction of the earlier chapters is at least 500. In the earlier events, as many as 70 percent of the conference participants were noted as C level executives, and about 20 percent – investors. Also, participation has been confirmed by leading business names such as Bitcoin Gold, PwC, Arcadia Crypto Ventures and TDA Capital London and many more.

For more information, visit: https://www.block-hedge.com/switzerland/

For sponsorship Opportunities: animesh@block-hedge.com

For Speaking Opportunities: amitabh@block-hedge.com

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FINMA issues landmark Swiss license for crypto asset management

Switzerland’s financial services regulator has issued its first license for cryptocurrency asset management, after greenlighting an application from a domestic cryptocurrency investment fund.

The Swiss Financial Market Supervisory Authority granted licensing approval to Crypto Fund, an investment fund based in Zug, Swissinfo reported. Originally launched in 2017, the fund becomes the first in Switzerland to receive recognition under the new licensing regime.

The move enables crypto fund to offer a wider range of products, which it is expected could help encourage institutional investors into the space. And with the licensing system now officially up and running, the issue confirms Switzerland’s bid to become a ‘Crypto Nation’—a stated aim of the Swiss market amidst growing competition from rival jurisdictions.

Jan Brzezek, CEO of Crypto Fund’s parent company Crypto Finance, welcomed the license, which is seen as a significant win for the company. Brzezek was quoted by the Swiss news outlet saying, “The importance of crypto assets is growing and our aim is to accelerate maturity in these markets. Regulatory recognition remains highly sought after by participants, as seen in recent press and company statements.”

According to local media reports, the success of Crypto Fund could be followed by several others, with a number of firms thought to be progressing applications for the same license. These include applications to offer banking services to the crypto sector, which would solve the current lack of banking provision, and dismantle a considerable barrier to expansion of Zug’s ‘Crypto Valley.’

With the current regulatory setup especially appealing to corporate operators and institutional investors in the sector, the region is already regarded as one of the foremost jurisdictions for blockchain and crypto startups.

The announcement follows on from similar approvals given to a blockchain firm under anti-money laundering laws, by the Financial Services Standards Association, which itself is authorized by FINMA to oversee anti-money laundering compliance.

Zug has also been participating in a number of blockchain trials, including a model for handling municipal votes through a distributed ledger platform.

With the first new license of its kind issued to Crypto Fund, it remains to be seen how many more companies will follow suit, as Switzerland continues to establish its reputation as the cryptocurrency jurisdiction of choice for serious cryptocurrency businesses.

Note: Tokens on the Bitcoin Core (segwit) Chain are Referred to as BTC coins. Bitcoin Cash (BCH) is today the only Bitcoin implementation that follows Satoshi Nakamoto’s original whitepaper for Peer to Peer Electronic Cash. Bitcoin BCH is the only major public blockchain that maintains the original vision for Bitcoin as fast, frictionless, electronic cash.

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Leading crypto experts to speak at the Blockchain & Bitcoin Conference Switzerland

On October 9, Geneva will welcome the Blockchain & Bitcoin Conference Switzerland for the second time. The event planned by the international company Smile-Expo will gather professionals in the DLT industry who will focus on the most topical issues of the sphere.

Who will speak at the conference?

Among the participating speakers there will be Jörn Erbguth – DLT and data protection advisor. The expert will analyse how DLT and GDPR can work together. He will discuss the difficulties of GDPR compliance and existing approaches to new regulations.

Challenges posed by regulations will also be discussed by the welcomed speaker at Blockchain & Bitcoin Conferences Arnab Naskar. CEO at SICOS S.a.r.l. and the qualified expert in legal sphere will give an insight into the retail investments platforms and explain how they meet regulations.

Dr. Quy Vo-Reinhard, who was one of the HIT Foundation establishers and is currently the company’s CDO, will analyse how to tokenize health data. DLT and big data specialist will highlight the positive sides of DLT implementation in the healthcare industry and will elaborate on the sphere’s potential future.

The event will also be joined by Blockchain & Bitcoin Conferences’ frequent speaker Aleks Bozhinov. The specialist is the Co-founder & CMO at Crowdholding and a trusted ICO advisor. In his presentation, he will focus on how businesses can improve their work introducing DApps. The expert will pay a special attention at DLT advantages and will define the way of developing and integrating DApps for traditional firms.

Michael Guzik, Principal and Lead ICO at Blockchain Valley Ventures and Lykke, will become a speaker as well and will take part in 2 panel discussions. As Switzerland is known for its innovative blockchain applications in many sectors, Zug’s leading specialist in the DLT will focus on its impact on the world’s biggest industries and will also share knowledge about current guidelines and regulations for ICO.

Here is a video.

What else is waiting for visitors?

The conference will also feature the demozone. There, DLT-based corporation will have a space to show their latest developments and present their innovative ideas to the audience.

Pitch-sessions will become a part of the event as well. They will allow blockchain enthusiasts to acquaint visitors with their projects and find potential business partners and investors.

The event is arranged by Smile-Expo. The company offers 50 last tickets for Blockchain & Bitcoin Conference Switzerland with the reduced price! New price for the tickets – €400 €240! Go here to get it!

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Swiss startup raises over $100 million for crypto bank

A startup in Switzerland has already raised 100 million Swiss francs ($100 million) to put up a bank that would offer cryptocurrency-related products, news agency Reuters reported.

SEBA Crypto AG also wants to offer more traditional banking services to cryptocurrency firms that many existing financial institutions are reluctant to serve due to know-your-customer (KYC) and anti-money laundering (AML) regulations.

SEBA CEO Guido Buehler, a former manager at UBS, said, “SEBA wants to bridge the gap between traditional banking and the new world of crypto… Our mission is to become a market leader in the convergence of traditional finance with the crypto economy.”

Among SEBA’s backers are Swiss firm Black River Asset Management LLC and Hong Kong-based Summer Capital.

The company has already applied for a banking and securities dealer license with the Swiss Financial Market Supervisory Authority (FINMA), which has already approved the entry of several cryptocurrency-related firms into the financial sector. According to Reuters, FINMA has confirmed that it has been in talks with SEBA regarding their application.

Chairman Andreas Amschwand, another former UBS manager, said, “In Switzerland we have commitment from various authorities to establish a comprehensive regulatory environment for the development of blockchain technology and the sustainable, stable growth of crypto assets. This makes Switzerland the ideal place to launch a new financial services paradigm.”

Last February, FINMA issued its guidelines for initial coin offerings (ICOs), making Switzerland one of the first countries in the world with such a regulatory framework.

Last June, Hypothekarbank Lenzburg announced that it was welcoming blockchain and cryptocurrency companies to open corporate accounts with them, after the bank had held consultations with FINMA. And early this month, the financial regulator approved blockchain company Smart Valor’s application to act as financial intermediary.

As welcoming as Swiss regulators have been to the industry, some other governments, particularly that of Liechtenstein, have established themselves as crypto-friendly havens. To ensure that potential cryptocurrency investors do not go elsewhere, Zug financial director Heinz Tännler commissioned the Swiss Bankers Association last June to form a task force that would assist blockchain companies in opening and maintaining bank accounts in the country.

Note: Tokens on the Bitcoin Core (segwit) Chain are Referred to as BTC coins. Bitcoin Cash (BCH) is today the only Bitcoin implementation that follows Satoshi Nakamoto’s original whitepaper for Peer to Peer Electronic Cash. Bitcoin BCH is the only major public blockchain that maintains the original vision for Bitcoin as fast, frictionless, electronic cash.

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