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The Swiss government has always held an open mind when it comes to Bitcoin-related companies and legislation. Last year, the area voted to encourage consumers to pay their taxes using Bitcoin and Ether, which was perceived as a promising sign for the industry. Following that, Zug, one of the largest towns in the Alpine region, became the first canton, among many other Swiss towns, to allow cryptocurrency tax payments.
In a surprising turn of events, the region’s top financial regulator, the Swiss Financial Market Supervisory Authority, or FINMA, has refused Bitcoin Suisse, the region’s largest crypto-financial service provider, a banking licence.
In 2019, Bitcoin Suisse AG filed for a banking licence with the regulator. However, FINMA ruled the company’s application for a banking licence “ineligible for clearance” earlier today.
According to FINMA, the permission was refused based on “current information” because “the prognosis is unfavourable.” As the regulator indicated that a licence is “unlikely,” Bitcoin Suisse told FINMA that it will withdraw its application for the licence. As a result, FINMA has agreed to halt the licencing process.
In a statement explaining its decision, FINMA said that it discovered “indications of vulnerabilities in the money laundering security mechanisms” and said:
“Bitcoin Suisse…is not supervised by FINMA but is, however, subject to supervision by an anti-money laundering self-regulatory organization.
FINMA’s responsibility for unregulated companies focuses on opening investigations and, where necessary, taking corrective measures where there are indications that supervisory law has been breached through the unauthorized activities being carried out without the required license.”
If the cryptocurrency corporation had secured the licence, it would have helped them. In fact, in most situations, the approval immediately allows the company to apply for a broker-dealer licence. Following this legal failure, it would be important to see if the organisation continues to stay or relocate its headquarters to other areas.