Swiss Cryptocurrency License

Decoding Swiss Cryptocurrency Regulation

I am routinely fielding inquiries regarding individuals wanting to obtain a “Swiss Cryptocurrency License”. Of course, there is no such license. Apart from the Swiss Fintech License, which I will discuss in a later post, the license required to, for instance, operate a cryptocurrency exchange is not specifically designed for blockchain ventures. In fact, much like the framework found in the United States – money transmitter licenses, the Swiss Financial Intermediary license is payments/custody license that has been adapted to the cryptocurrency space. An explanation follows:

Swiss Regulation of Cryptocurrency

There are no specific laws or regulations governing cryptocurrency in Switzerland. Moreover, the laws of Switzerland do not define the term cryptocurrency. However, it has defined a “virtual currency” to be:

A virtual currency is a digital representation of a value which can be traded on the Internet and although it takes on the role of money – it can be used as a means of payment for real goods and services – it is not accepted as legal tender anywhere. These currencies have their own denominations. They differ from e-money in that they are not based on a currency with legal tender status. Virtual currencies exist only as a digital code and therefore do not have a physical counterpart for example in the form of coins or notes. Given their tradability, virtual currencies should be classified as an asset

Swiss Anti-Money Laundering Regulation

FINMA would later adopt and incorporate the definition of virtual currency when amending the Swiss Anti-Money Laundering Act (the “AMLA”), “money or asset transactions are deemed to be the transfer of assets through the acceptance of cash, precious metals, virtual currencies . . .”  Anyone who provides payment services or who issues or manages a means of payment is a financial intermediary subject to the AMLA (Art. 2 para. 3 let. b AMLA). Notwithstanding the foregoing, FINMA has offered guidance regarding Initial Coin Offerings and therein provided classifications for virtual currencies:

  1. Payment tokens: Payment tokens (synonymous with cryptocurrencies) are tokens which are intended to be used, now or in the future, as a means of payment for acquiring goods or services or as a means of money or value transfer. Cryptocurrencies give rise to no claims on their issuer.
  2. Utility tokens: Utility tokens are tokens which are intended to provide access digitally to an application or service by means of a blockchain-based infrastructure.
  3. Asset tokens: Asset tokens represent assets such as a debt or equity claim on the issuer. Asset tokens promise, for example, a share in future company earnings or future capital flows. In terms of their economic function, therefore, these tokens are analogous to equities, bonds or derivatives. Tokens which enable physical assets to be traded on the blockchain also fall into this category.

Thus, under existing Swiss law, both issuing and the subsequent trading of cryptocurrencies may be subject to anti-money laundering requirements and, in turn, require licensing. The relevant starting point is whether the party has engaged in “financial intermediation” and would therefore be considered a financial intermediary under the AMLA.

Swiss Regulation of Financial Intermediaries

There exists two groups of “financial intermediaries” under Swiss law. The first group belongs to the banking sector which includes banks and securities dealers regulated by FINMA. The second group – the most common financial intermediaries, are non-banking sector firms.

Financial intermediaries belonging to the non-banking sector are defined as any individual or entity, which on a professional basis:

  1. Accept or hold deposit assets belonging to third parties;
  2. Assist in the investment of such assets; or 
  3. Assist in the transfer of such assets

This definition includes, among other activities, individuals or entities that provide services related to payment transactions. Non-banking financial intermediaries are required to either join a Swiss self-regulatory organization (“SRO”) or obtain a license from FINMA to act as a “directly supervised financial intermediary (“DSFI”).

Financial Intermediaries & Cryptocurrency

Accordingly, a financial intermediary license is required to engage in the following cryptocurrency-related activities:

  1. Initial Coin Offerings: FINMA considers the issuing of cryptocurrencies as financial intermediation; and
  2. Cryptocurrency Exchanges: FINMA requires a financial intermediary license where a party: (i) accepts or holds cryptocurrencies belonging to a third parties as a deposit; (ii) assists in the investment of cryptocurrencies; or (iii) assists in the transfer of cryptocurrencies.

Notably, the aforesaid requirements apply only with respect to the issuance or trading of “payment tokens,” as defined above. That is, the issuing of payment tokens constitutes the issuing of a means of payment subject to this regulation as long as the tokens can be transferred technically on a blockchain infrastructure. 

In the case of utility tokens, anti-money laundering regulation is not applicable as long as the main reason for issuing the tokens is to provide access rights to a non-financial application of blockchain technology (see Art. 2 para. 2 let. a no. 3 AMLO, FINMA Circ. 11/1 “Financial intermediation under AMLA” margin no. 13 et seq.). Asset tokens, on the other hand, will trigger the obligation to obtain a “security dealers license” from FINMA. 


A former professional rugby player, Adam S. Tracy brings over twenty years’ experience as an attorney, consultant and dealmaker with a particular focus on cryptocurrency, digital products, payments and immersive corporate structures. As an accomplished executive and advisor to high risk merchants and stakeholders, Adam has proven himself as a results oriented, decisive leader with proven success advising early market entrants, technology adapters, as well as established participants across a wide range of verticals. Adam Tracy’s attack-first personality allows him to excel in dynamic, demanding environments including complex corporate negotiations, distressed environments and regulatory investigations.

In addition, Adam S. Tracy also has a successful track record co-founding high risk industry ventures, building & leading cross-functional teams, and spearheading diverse corporate transactions. A serial entrepreneur, Adam has successfully started and created exits across a wide swath of markets, including various mobile SaaS ventures, nutraceuticals, peer-to-peer payment systems, and several telemarketing-based ventures. Moreover, as a recognized expert in the payments field, Adam Tracy has been a blockchain and digital currency evangelist and influencer since the early days of Bitcoin.

Utilizing his proprietary “Pre-Event Driven™” strategy for decision making, Adam S. Tracy further leverages his over twenty years’ experience to create cost-effective, value-add solutions for each client. A data-driven acolyte, Adam continually refines his strategies based on field studies and data collection. Moreover, Adam Tracy further augments his range of solutions by actively networking with regulators, liquidity providers, legal and compliance experts, deal-flow brokers, investors and management of leading high risk industry ventures.

Adam S. Tracy earned his Bachelor of Science in Computer Applications and Bachelor of Science in Finance from the University of Notre Dame. He subsequently earned his Masters in Business Administration from the DePaul Kellstadt Graduate School of Business, while concurrently earning his Juris Doctorate from the DePaul College of Law. Adam lives outside Chicago with his with his wife, son, four dogs, and two cats.

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