Financial Crime World

Blockchain-Based Assets Emerge as New Investment Opportunities

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The world of finance has witnessed a significant shift with the rise of blockchain-based assets, offering a novel way for investors to participate in traditional markets. These innovative assets include non-traditional investments such as real estate and art paintings, which can now be traded on the blockchain.

Regulatory Framework

In Switzerland, asset tokens are classified as securities by FINMA, similar to shares from a regulatory perspective. This classification means that companies must adhere to strict rules when issuing these tokens, including:

  • Requirement for a prospectus
  • Audit requirements
  • Intermediaries involved in placement of these securities may be subject to additional regulations

Stablecoins

Stablecoins, a type of asset token pegged to a specific value, have gained popularity in recent times. FINMA has outlined guidelines for the treatment of stablecoins under Swiss supervisory law, emphasizing:

  • Understanding their economic function and purpose
  • Variability depending on backing assets and holder rights

AML Regulations

The Anti-Money Laundering (AML) Act requires financial intermediaries and dealers to comply with strict regulations, including:

  • Due diligence requirements
  • Membership in a self-regulatory organization or direct supervision by FINMA
  • Custody-wallet providers and anyone facilitating the transfer of virtual currencies are also subject to these regulations

DAOs

Decentralized Autonomous Organizations (DAOs) have emerged as a new form of organizational structure, operating through smart contracts on a blockchain. While not recognized as a specific term in Swiss law, DAOs may be governed by:

  • Existing legal frameworks, such as collective investment schemes or simple partnerships

Implications of New EU Law

The European Union’s recent introduction of stricter regulations for payment services and e-money has led to a shift towards more regulatory certainty in Switzerland. The country’s fintech licence has become a popular choice for companies seeking to operate within the Swiss market, while still complying with EU standards.

Conclusion

As the blockchain-based assets landscape continues to evolve, investors are presented with new opportunities for diversification and growth. However, it is essential to understand the complex regulatory framework surrounding these investments to ensure compliance and minimize risks.