Switzerland’s financial regulator has approved the country’s first fund investing primarily in crypto assets.
The Swiss Financial Market Supervisory Authority (FINMA) approved the Crypto Market Index Fund but has restricted it to qualified investors. It was also categorized under “other funds for alternative investments” that have particular risks.
Due to those particular risks, the approval of any crypto asset fund is conditioned upon specific requirements, FINMA said. For instance, the fund may only invest in established assets with a sufficiently large trading volume and investors can only work through established counterparties. The platforms must also be based in a member country of the Financial Action Task Force, and are subject to corresponding anti-money laundering regulations.
“In order to facilitate serious innovation, FINMA applies the existing provisions of financial market laws in a consistently technology-neutral way,” the Swiss regulator stated.
Switzerland setting crypto standards
The move comes as the latest in Switzerland setting the standards for cryptocurrency and blockchain integration. The alpine country has developed rules around crypto in order to become a world center for digital currencies. Crypto exchanges are welcome if they comply with rules combating financial crime and secure the proper licenses.
Cryptocurrency hedge fund Tyr Capital has been slowing ceding partners there away from London over the past 18 months. Tyr partner Edouard Hindi praised the country’s foundational framework and the cooperation seen from regulators. He said the Swiss Chamber of Commerce even helped facilitate his visa paperwork.
Additionally, FINMA recently granted a pair of licenses to the firm SIX Digital Exchange, the anticipated digital arm of the country’s stock exchange SIX. The licenses will permit SIX Digital Exchange to operate a stock exchange and depository for blockchain-based securities.
However, the regulatory authority is also working to establish a robust framework within which cryptocurrencies development can flourish. To that end, FINMA recently applied more robust anti-money laundering policies on cryptocurrencies.