FINMA will require KYC verification for transactions with crypto assets of more than $1,000

Switzerland is tightening cryptocurrency regulation. Thus, users of digital currencies will be required to pass identification when performing transactions with crypto assets worth more than $1,000.

Switzerland, known for its friendly attitude to new technologies that attracts hundreds of cryptocurrency companies to the country, is expanding its financial regulatory framework. Some rules imply increased supervision of cryptocurrency and blockchain companies in accordance with new international standards for operations with digital assets.

The Swiss financial market Supervisory authority (FINMA) has proposed lowering the minimum amount for transactions with crypto assets that require customer identification. The regulator wants to reduce the limit from 5,000 Swiss francs to 1,000 francs (just over $1,000). FINMA States that it “recognizes the increased risks of money laundering in this area” and that the measure may not appeal to many cryptocurrency companies and their clients, for whom privacy is important.

The amendments are the result of the new Swiss law on financial services and the law on financial institutions. Both bills were passed by the Swiss Parliament in June 2018. At a meeting in November 2019, the Swiss Federal Council proposed to improve the legislation on distributed registry technology (DLT) in order to clearly define the legal status of technologies and remove barriers to their application.

These laws oblige FINMA to adopt various provisions that will be “mainly technical in nature”. The regulator has already developed a new Decree on financial institutions, which ” regulates the details of professional liability risk insurance for portfolio managers, Trustees and managers of collective assets, the details of calculating the minimum threshold for obtaining authorization as a portfolio Manager, as well as risk management and internal management.”

The Swiss financial regulator has also prepared amendments to other regulations and circulars. The changes will be submitted for public discussion within the next few months.

Changes to the threshold for identifying cryptocurrency users are also related to the recommendations of the International financial action task force on money laundering (FATF). In accordance with the recommendations of the intergovernmental organization, cryptocurrency companies (exchanges, wallet providers and payment operators) must identify customers who transfer crypto assets worth more than $1,000 or €1,000.