Switzerland’s Financial Market Supervisory Authority (FINMA) has issued new guidance for blockchain and cryptocurrency FinTech companies, warning them against breaking anti-money laundering (AML) laws.
While recognizing that the new technology could give the financial sector an innovative boost, FINMA added that “blockchain-based business models cannot be allowed to circumvent the existing regulatory framework.”
FINMA particularly pointed out that the inherent anonymity of blockchain technology presents key risks against the ability to avoid terrorism funding, money laundering and other nefarious usages of the innovations.
The financial watchdog reminded blockchain businesses that “Switzerland has always applied the Anti-Money Laundering Act to blockchain service providers.” This, it stated, means that these enterprises must verify the identity of their customers and the beneficial owner.
Moreover, businesses must use a risk-based approach to monitoring business relationships and to file a report with the Money Laundering Reporting Office Switzerland (MROS) if there are reasonable grounds to suspect money laundering.
Additionally, it argued that all information must be provided to and interpreted by intermediaries and double-checked against sanction lists.
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