SWITZERLAND Law and Practice Contributed by: Yves Klein and Antonia Mottironi, Monfrini Bitton Klein and Ardenter Law
7.3 Crypto-Assets There is no definition of the terms crypto-assets or cryptocurrencies in Swiss law and the legal treatment of these assets will depend on each area of law. In general terms, crypto-assets are treated as property but, like for any other types of assets, the way they can be frozen, seized or forfeited will depend on the type of holding over them. In criminal proceedings in particular, the Swiss Fed - eral Court has ruled that the immediate liquidation of seized crypto-assets and their conversion into Swiss francs in view of forfeiture infringed the legal provi - sions of the SCPP. In spite of the high volatility of this type of asset, law enforcement authorities must seek the advice of experts to proceed to the appropriate liquidation of crypto-assets, as they have a duty of care over the managed seized assets. In February 2021, the Federal Act on Adaptation of Federal Law to Developments in Distributed Ledger Technology (DLT) entered into force. Among others, bankruptcy, anti-money laundering and financial mar - ket laws were amended to take into consideration the increase of the development of blockchain and DLT technologies. Article 242a, DCBA has been included in bankrupt - cy law under a new section “Restitution of crypto- assets”. It provides that the bankruptcy office holder decides on the restitution of crypto-assets, of which the debtor had the power to dispose at the open - ing of the bankruptcy and that are claimed by a third party. The claim is justified if the debtor has under - taken to keep the crypto-assets at the disposal of the third party at all times and if the crypto-assets are individually attributed to the third party or are attrib - uted to a community and the third party’s share is clearly determined. This legal provision only targets the bankruptcy of a custodian company and aims at the restitution of their assets to the clients. Subject to these legal requirements, these clients therefore have a property claim that benefits from a priority over the ordinary creditors, who only dispose of a claim against the bankrupt estate.
With respect to the financial markets laws, platforms based on DLT have been included in the definition of financial market infrastructures (Article 2, littera a, 5a of the Financial Market Infrastructures Act, FinMIA). As a consequence, financial crimes can now also be committed on these types of platforms. The federal Act on Money Laundering (ML Act) was also amended to include DLT-based platforms in the definition of financial intermediaries (Article 2, para - graph 2, ML Act). Initial coin offerings and services provided in a permanent business relationship in con - nection with the transfer of cryptocurrencies are now considered as financial intermediation and are subject to the ML Act’s obligations of diligence.
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