Switzerland regulators crack down on ICOs, say some might be guilty of 'terrorist financing'
NEW YORK - Switzerland's financial watchdog, the Swiss Financial Market Supervisory Authority, is concerned that some initial coin offerings are violating the country's laws against "terrorist financing."
FINMA announced on Friday that it was looking into a number of ICOs for breaching "provisions on combating money laundering and terrorist financing" and other regulations.
ICOs allow startups to issue their own digital token to raise, in some cases, millions of dollars in a matter of seconds. They've come under scrutiny by regulators because companies are often able to raise money through an ICO without disclosing substantive information to investors.
FINMA said in a statement certain ICOs may be subject to existing financial regulations.
"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," the agency wrote.
Switzerland has been relatively open to cryptocurrencies, with one town in the country allowing residents to pay their taxes in bitcoin, the largest digital coin, according to CoinDesk. In July, FINMA gave clearance for Falcon Private Bank to offer bitcoin-linked products to its clients.
Still, the massive growth of the ICO market, which has grown to more than $2 billion this year, according to data from fintech analytics firm Autonomous NEXT, has forced the agency to crack down.
On the whole, the guidance has been viewed positively by folks in the cryptocurrency community.
Oliver Bussmann, President of the Crypto Valley Association, a Swiss organization, said in a statement emailed to Business Insider that the announcement comes as no surprise.
"FINMA clearly states in its guidance that it supports the innovative potential of blockchain technology, but also that, depending on the structure, regulation can and should apply," Bussmann said. "We think this is another sign of the Swiss regulator's clear and balanced approach to blockchain and Fintech."
In July, the US Securities and Exchange Commission made a similar announcement about ICOs, and, on Friday, South Korea deemed initial coin offerings illegal.
- Thailand is now welcoming Indians with open arms, but are its drought-hit islands really prepared for a tourism influx?
- Thoughtful gift ideas to make Mother's Day extra special
- Muslims up, Hindus down: What’s the larger picture behind India’s religious population trends?
- Scooch over magic mushrooms, toad venom could be the next big psychedelic for depression and anxiety!
- TBO Tek IPO allotment – How to check allotment, GMP, listing date and more
- Nothing Phone (2a) blue edition launched
- JNK India IPO allotment date
- JioCinema New Plans
- Realme Narzo 70 Launched
- Apple Let Loose event
- Elon Musk Apology
- RIL cash flows
- Charlie Munger
- Feedbank IPO allotment
- Tata IPO allotment
- Most generous retirement plans
- Broadcom lays off
- Cibil Score vs Cibil Report
- Birla and Bajaj in top Richest
- Nestle Sept 2023 report
- India Equity Market