Bitcoin working group launched
Bitcoin and ICOs are to be regulated by law in Switzerland: A working group is to examine the requirements by the end of the year. Because blockchain transactions regularly take place across borders, international private law implications must also be taken into account.
Now the Swiss government is also taking a close look at Bitcoin and ICO and cryptocurrencies: by the end of 2018, a working group is to examine the legal framework for blockchain technology. Particular attention is to be paid to so-called Initial Coin Offerings (ICO), as the State Secretariat for International Financial Matters (SIF), based at the Ministry of Finance, recently announced.
In this process, companies collect money from investors and issue digital shares (tokens) instead of shares or bonds. These are then traded as cryptocurrencies on special exchanges. However, more and more countries are putting a stop to trading in cryptocurrencies: South Korea is considering a complete ban, China apparently wants to make trading impossible. France and Germany are discussing economic and fiscal challenges that have arisen in the meantime in the handling and control of virtual currencies.
Bitcoin also a topic at the G20 summit
The risks and dangers for the digital workplace still appear to be high: a loss of reputation could one day result from one-sided offers from Swiss fintech companies. Blockchain providers are repeatedly the target of hacking and fraud attempts. At the same time, the tax system is to be tied to cryptocurrencies. Too many question marks regarding Bitcoin are currently occupying the Swiss authorities and economy.
Germany and France want to present a joint proposal for regulating Bitcoin at the G20 summit in March. With the future of trading uncertain, Bitcoin, the best-known virtual currency, is now also on a downward slide.
Systemic risks present
Themes and hypotheses about Bitcoin are circulating like wildfire. In addition to the quasi-regulatory opportunities that these new currencies bring with them, there are also systemic and individual risks associated with the launch of various cryptocurrencies. Now, Swiss parliamentarians and insiders are also calling for these new currencies to be incorporated into the existing Swiss legal system.
At the end of September 2017, the Swiss Financial Market Supervisory Authority stated in a supervisory notice that, depending on their design, so-called "coin or token offerings" could fall under the existing financial market laws, whereby it would depend on the design in the individual case. The aim of this first interpellation is to shed light on legal issues and the risks of cybercurrencies.
Working group integrates industry
The Federal Council shares the view that a wide range of legal questions arise in connection with Bitcoins and other cyber currencies. In some cases, these questions go beyond financial market law. In particular, they also concern aspects of general private law and public law.
" (...) These questions show that the use of blockchain technology or cryptocurrencies entails diverse risks in addition to opportunities. Against this background, the Federal Council intends, in addition to the work already underway, to analyse in greater depth the questions raised (and others) from the areas of financial market law, but also beyond."
Initial clarifications are currently being made as part of the working group under the leadership of the Federal Department of Finance mentioned by the Federal Council in its response to the Béglé motion (17.3818). It is said that the blockchain industry will be involved as far as possible. In the meantime, private individuals and SMEs must remain cautious and handle new, globally fluctuating currencies with care.
More information on the working group on blockchain/ ICO can be found on the website of the Federal Department of Finance:
