The Swiss financial authorities have modified their anti-money laundering regulations in regard to cryptocurrency transfers.
The Swiss Financial Market Supervisory Authority (FINMA) has partially changed its Anti-Money Laundering Ordinance (AMLO) as a result of consultations that began earlier this year. This revision clarifies the application of a maximum limit for unidentified crypto exchange transactions.
In a press release that was issued on Thursday, the regulatory body stated that the regulations, which are now updated to reflect the most recent amendments to Switzerland's Anti-Money Laundering Act as well as the Anti-Money Laundering Ordinance issued by the Federal Council, will go into effect on January 1, 2023.
FINMA noted that the feedback it collected confirmed its position that the mandatory identity verification of beneficial owners of funds and the periodic checks establishing that client data is up to date do not need to be set out in detail at the ordinance level. FINMA also noted that the feedback it collected confirmed its position that there is no need to set out in detail the obligation to verify the identity of beneficial owners of funds.
The Financial Industry Regulatory Authority (FINRA) stressed that a clause that obliges intermediaries to regulate the procedures for updating and monitoring customer records by means of an internal directive will continue to be in effect.
The authority also pointed out that the ordinance is being extended to cover distributed ledger trading facilities and revealed that it received many comments regarding the reporting threshold for transactions involving virtual currencies. In addition, the authority mentioned that it is expanding the ordinance to cover distributed ledger trading facilities. The following is what FINMA mentioned in their announcement:
FINMA maintains its stance on the regulation that technical measures are required to prevent the threshold of CHF 1,000 for linked transactions during a 30-day period from being exceeded. This attitude was taken in light of the risks posed by recent cases of abuse (and not just per day).
The regulatory body made the observation, however, that this obligation is only applicable to transactions involving the exchange of crypto assets for fiat currency or any other kind of anonymous payment.
When transferring cryptocurrency that has a fiat value that is greater than the specified threshold, crypto asset service providers are required, in accordance with the so-called "travel rule" that was implemented in Switzerland on January 1, 2020, to share identifiable customer data and to demonstrate ownership of non-custodial wallets. This rule came into effect on that date.
FINMA lowered the threshold that triggers the reporting duties through another amendment of its AMLO in February of that year, citing increased risks of money laundering. The previous threshold was 5,000 Swiss francs, which is equivalent to approximately $980 at the time of writing. The new threshold is 1,000 Swiss francs.