The Financial Market Supervisory Authority (FINMA) of Switzerland is mandated to oversee financial legality within Swiss markets. Today, a post on the FINMA website revealed that for the second time in as many weeks, FINMA has approached cryptocurrency regulation. This comes on the heels of several counterpart institutions from other nations also taking positions on the token offering craze. Moreover, this latest action from the Swiss regulator may have been influenced by the recent visit of Johann Schneider-Ammann, Swiss federal councilor and head of the Federal Department of Economic Affairs, to Zug valley, which is an international blockchain and cryptocurrency development hub.
The new FINMA posting states that an observed increase in token offerings (also called ICOs) from within Switzerland has prompted FINMA to investigate their associated procedures. FINMA has consequently released rudimentary guidance related to token offerings and will be conducting investigations into their legal status when emanating from within Swiss borders. Details about previous, current, or forthcoming investigations were sparse. Per the posting:
“Given the close resemblance, in some respects, between ICOs/token-generating events and conventional financial-market transactions, one or more aspects of financial market law may already cover ICO campaigns according to their various models. FINMA is currently looking into a number of different cases. Moreover, whenever FINMA is notified about ICO procedures that breach regulatory law or which seek to circumvent financial market law it initiates enforcement proceedings.”
In what is becoming a common trend among its foreign equivalents, FINMA recognizes that cryptocurrencies and token offerings may, to some degree, fall under previously established laws. The variety of ways a company can structure the technical and business standpoints of a token offering seem to suggest that case-by-case evaluations will be needed to verify compliance with the law. Although token offerings remain unregulated in Switzerland, the main takeaway from FINMA’s announcement are the guidelines. FINMA’s guidance is related to legal and security concerns surrounding “provisions on combating money laundering and terrorist financing; banking law provisions; provisions on securities trading; and provisions set out in collective investment scheme legislation.”
This latest action from FINMA is further evidence that the entire financial regulatory establishment across some of the most powerful nations on Earth is taking greater notice of token offerings. The sheer number of regulatory bodies that have commented within the past few months could be signaling a seismic shift for token offerings and cryptocurrencies in general. If 2017 has been the year of the token offering (and with cumulative token offerings surpassing early-stage venture capital financing, it truly has been), 2018 may be shaping up to be the year of regulation.