SWITZERLAND Law and Practice Contributed by: Lukas Morscher and Lukas Staub, Lenz & Staehelin
units – ie, tokens (see 10.2 Local Regulator’s Approach to Blockchain and 10.3 Classifica - tion of Blockchain Assets ). Most recently, FINMA issued specific guidance for the staking of crypto-assets and for stable - coins in 2023 and 2024, respectively. 6.4 Listing Standards The FMIA requires authorised stock exchanges and multilateral trading facilities to implement appropriate self-regulation, which is binding on the respective participants. SIX Swiss Exchange, as the dominant stock exchange, issues listing rules that have been amended to reflect the new financial market regulation (see 2.2 Regulatory Regime ). 6.5 Order Handling Rules The FMIA requires authorised stock exchanges and multilateral trading facilities to implement rules on orderly and transparent trading, and to monitor trading in order to detect violations of statutory and regulatory provisions. The detailed rules are thus issued by the relevant trading facil - ity – eg, SIX Swiss Exchange. Furthermore, best execution rules apply (see 3.3 Issues Relating to Best Execution of Customer Trades ). Note that these rules would not apply to tokens that do not constitute a security. 6.6 Rise of Peer-to-Peer Trading Platforms Under the FMIA, organised trading facilities for trading securities and other financial instruments require the relevant FINMA authorisation (see 6.1 Permissible Trading Platforms ), which includes strict limitations – eg, on authorised participants in such a trading facility. The new DLT trading facility allows, to a certain extent, for P2P trad - ing of digital assets (see 6.1 Permissible Trading Platforms ).
teria to constitute a security or a derivative. The one relevant exemption is that there is a sepa - rate DLT trading facility, which is a trading venue for DLT-based securities only (see 10.2 Local Regulators’ Approach to Blockchain ). 6.3 Impact of the Emergence of Cryptocurrency Exchanges By definition, decentralised systems are par - ticularly vulnerable to anonymity risks. Indeed, in contrast to traditional financial services, virtual currency users’ identities are generally unknown, although in most cases, they are only pseudony - mous, and there may be no regulated interme - diary that serves as a gatekeeper to mitigate money laundering and financing of terrorism risks. Most virtual currencies, such as Bitcoin and Ether, use a pseudonymous blockchain, meaning that a user’s identity is not linked to a particular wallet or transaction. However, while a user’s identity is not visible on the distributed ledger, anyone can access and view the trans - action information – such as dates, value and the counterparties’ addresses – that is publicly recorded on it. Therefore, enforcement authori - ties can, in the course of their investigations, track transactions where a user’s identity is linked to an account or address (such as wallet providers or exchange platforms). Swiss AML legislation does not provide for a def - inition of virtual currencies. However, since the revision of the FINMA AML Ordinance in 2015, exchange activities in relation to virtual curren - cies – eg, money transmission with a conver - sion of virtual currencies between two parties – are subject to AML rules. In general, the exact scope of regulation applicable to cryptocurrency exchanges depends on the level of decentralisa - tion and activities involved (see 6.1 Permissible Trading Platforms ) as well as the economic func - tion and transferability of the blockchain-based
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