Swiss Market Watchdog Approves First Regulated Crypto Fund for Investors

Switzerland’s financial market watchdog announced that it had approved the first regulated cryptocurrency fund in the country.

The Swiss Financial Market Supervisory Authority (FINMA) disclosed on Wednesday, September 29, that it had granted the launch of the Crypto Market Index Fund, according to Swiss law.

The market regulator further stated that the Crypto Market Index Fund would be restricted to qualified investors investing majorly in cryptocurrencies or digital assets with “sufficiently large trading volume” running on the blockchain or distributed ledger technology.

The FINMA classified under other funds for “alternative investments” with particular risks and stated that it would require investors to invest only through established counterparties based in a member country of the Financial Action Taskforce and are subject to corresponding Anti-Money Laundering regulations.

The Crypto Market Index Fund is launched by Swiss asset management firm Crypto Finance AG and is administered by investment management firm PvB  Pernet von Ballmoos AG. At the same time, custody is offered by regulated custodian SEBA Bank AG.

Crypto Finance AG said that the crypto fund would track the performance of the Crypto Market Index 10, a product administered by the Swiss market index under the SIX Swiss Exchange.

“The objective of the Crypto Market Index 10 is to reliably measure the performance of the largest, liquid crypto assets and tokens and to provide an investable benchmark for this asset class,” crypto Finance stated.

Besides that, FINMA has granted SEBA bank permission to provide digital assets to Swiss-domiciled mutual funds.

Announced on Wednesday, FINMA granted SEBA bank a license set to allow the bank to act as a custodian bank and offer liquid investment funds with cryptocurrencies.

SEBA Bank CEO Guido Buehler talked about the development and said that the license would attract more investment.

“This collective investment scheme license allows institutional clients, and then later retail clients, to invest into crypto assets on a liquid basis through fund structures,” Buehler said.

Swiss Crypto Adoption on The Rise

The development by The Swiss Financial Market Supervisory Authority (FINMA) to grant more regulatory approval for cryptocurrency investment instruments not only signals cryptocurrency adoption continues to gain momentum in Switzerland. Still, it marks a milestone for the progressive step towards approving a Crypto ETF in the country.

The Swiss financial market regulator embraces a more flexible approach to cryptocurrency than authorities in several other countries.

As a result, Switzerland is among the leading countries in terms of crypto adoption in Europe.

The FINMA approved many similar asset-oriented products in the recent past, with firms such as CoinShares and 21Shares have unveiled multiple exchange-traded products on the SIX Exchange.

In September 2020, the Swiss authorities started allowing local companies and citizens based in Zug to pay their taxes in either Bitcoin or Ethereum.

This year, FINMA granted permission to the Swiss bourse to develop an exchange dedicated to digital token offerings in mid-September this year.

Overall, Switzerland has been considered as a “crypto valley” s several industry firms are drawn to the jurisdiction over its friendly cryptocurrency and blockchain regulation.

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SEBA Bank granted the first Swiss digital asset custody license

SEBA Bank AG, a fully regulated Swiss-based institution with a focus on the offering of digital cryptocurrency assets, has today announced the approval of a CISA license from the Swiss Financial Market Authority, or FINMA, to facilitate an institutional-grade custodian service for nation-native collective investment schemes.

This announcement enables the bank to become Switzerland’s, and indeed one of the world’s first, digital asset centric banks to gain a custody license. The endorsement will allow the institution to provide greater investment opportunities to professional clientele in the emerging cryptocurrency markets.

Founded in mid-2018 advocating a philosophy of next-generation digital banking, the firm soon rose to prominence as a pioneer in the regulated digital asset sector. One year later in August 2019, the bank attained its banking and securities firm licence which introduced their SEBAwallet app, e-banking service and SEBA card to market, supporting five major cryptocurrencies including Bitcoin and Ethereum.

CEO of SEBA Bank, Guido Buehler shared his thoughts on the banks recent successes:

“Two years ago SEBA Bank received a Swiss banking and securities firm licence and is now enjoying excellent business momentum as institutional adoption of crypto & digital assets accelerates globally.”

Regulatory assurances in what is often considered a volatile market, soon attracted the attention of Europe’s elite. In mid-2020, France’s central bank Banque de France selected SEBA to participate in their experimental digital Euro pilot project in a bid to explore to feasibility of CBDC’s in cross-border payments.

Related: Swiss Exchange SIX granted approval to launch crypto marketplace

Buehler also commented on the implications of attaining the CISA licence for European adoption:

With our new CISA license, SEBA Bank continues its pioneering role in the institutional digital asset space. Asset Managers can now offer strategies based on crypto or other digital asset underlyings to a broader audience utilizing Swiss-based mutual fund structures secured by SEBA Bank as the CISA-licensed custodian.”