SWITZERLAND Law and Practice Contributed by: Oliver Widmer and Niku Gholamalizadeh, Pestalozzi
Swiss Financial Services Act and the Swiss Collec- tive Investment Schemes Act may apply if the digi- tal assets qualify as financial instruments or collec- tive investment schemes (particularly asset tokens). Depending on the nature and scope of the activity (sole marketing, offer, service provision), such require- ments may solely consist in the obligation to desig- nate marketing material as such or expand to compre- hensive regulatory conduct rules, such as prospectus requirements and affiliation obligations. 4.2 White Labelling In Switzerland, white-labelling is permitted in princi- ple but subject to strict conditions. A FINMA-licensed entity must remain fully responsible for the regulated activity and cannot “rent out” its licence. The licensed institution must act as the contractual counterparty and retain effective control over compliance, including AML and risk management. Outsourcing is allowed only where it does not impair supervision and key functions remain with the licence holder. Consequently, white-labelling does not enable unlicensed firms to independently provide regulated services in Switzerland. DeFi applications are among the recognised use cases in Switzerland, and there is no outright prohibi- tion on DeFi activity. CeFi firms in Switzerland may interact with or utilise DeFi protocols, but they remain fully subject to regulatory requirements. Swiss regula- tors emphasise that firms cannot avoid regulation by using decentralised structures. If a regulated activity is performed, the regulatory framework still applies irrespective of the technology applied. 5.2 DeFi Structures Switzerland does not recognise decentralised auton- omous organisations (DAOs) as a standalone legal form. DeFi projects therefore operate through tradi- tional Swiss legal entities acting as a legal wrapper for on‑chain governance structures. Dominating struc- tures are particularly the Swiss foundation (Articles 5. Decentralised Finance 5.1 Ability to Use DeFi
80-89 Civil Code), association (Articles 60-79), and GmbH structures under the CO. With the Ethereum Foundation, Cardano Founda- tion, Tezos Foundation, Web3 Foundation domiciled in Zug, the Swiss foundation is the dominating legal structure to operate DAO in Switzerland. A Swiss foundation is established under the Swiss Civil Code by executing a deed of incorporation, endowing the foundation with assets (minimum capi- tal of CHF50,000), appointing one or more founders (who need not be Swiss residents), and registering the foundation in the Commercial Register. The founda- tion must have a registered office in Switzerland and a foundation board composed of one or more members, at least one of whom must be resident in Switzer- land, and it is subject to supervision by the compe- tent cantonal foundation supervisory authority (and, where applicable, FINMA). Reporting and accounting are mandatory, while an audit is only required if cer- tain size or fundraising thresholds are exceeded, and the foundation’s purpose is generally irrevocable once established. Other requirements apply in case of establishment of other types of legal structures in Switzerland. 5.3 Liability In Switzerland, there is currently no Federal Supreme Court case law specifically addressing accountability and liability for harm caused by DeFi. Nevertheless, as in other areas of Swiss law, DeFi-related harm is assessed on the basis of the general rules of civil liability, which apply in a technology neutral manner irrespective of the decentralised or automated nature of the underlying system. Legal claims may arise on both a contractual and a non-contractual basis. Where a legal relationship exists between the user and an identifiable operator of a DeFi platform (for example through terms of use governing access to a trading interface or protocol), liability may be assessed primarily under contract law (Articles 97 et seq CO). In the absence of a contrac- tual relationship, potential claims are typically limited to non-contractual liability, in particular tort liability under Article 41 of the CO or, depending on the cir-
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