Switzerland Sticks to Tougher ID Checks for Crypto to Cash Transactions

Customers will be subject to the checks if they make transactions that total $1,000 or more over the course of a month.

AccessTimeIconNov 2, 2022 at 12:19 p.m. UTC
Updated Nov 2, 2022 at 3:14 p.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global event for everything crypto, blockchain and Web3.Register Now

The Swiss financial regulator is extending money-laundering checks for crypto transactions despite significant pushback from the country’s users.

Customers will have to prove their identity if they make transactions that total 1,000 Swiss francs ($1,000) or more over the course of a month when they swap crypto for cash or another anonymous form of money.

“Virtual currencies are often used as a payment instrument for illicit trade, notably in drug trafficking, on the darknet, or for the payment of ransoms after cyberattacks,” a report issued by the Financial Market Supervisory Authority (Finma) said. “The risk of money laundering in the domain of virtual currency is reinforced by potential anonymity and by the speed and cross-border nature of transactions.”

A consultation published by Finma in May proposed to tighten up the 1,000-franc limit which is currently measured daily, with a view to stopping "smurfing" – the breaking up of a large payment into smaller ones to avoid money-laundering checks.

But the regulator received multiple responses from citizens and crypto companies who said that the new rules weren't neutral between different technologies and that stores of customer data would be prone to hacking.

On Wednesday, Finma said it “stands by” its plans and declined requests to increase the threshold to as much a 25,000 francs, but conceded the new rules would apply only for anonymous transactions such as those on crypto ATMs.

Switzerland has sought to set itself out as a crypto hub, but regulators are keen to shake off its reputation as a site for money laundering, given the historic secrecy of its banking sector.

Disclosure

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.

Jack Schickler

Jack Schickler was a CoinDesk reporter focused on crypto regulations, based in Brussels, Belgium. He doesn’t own any crypto.


Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.