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Best practices for KYC/AML

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Switzerland’s FINMA Pushes New AML Rules to Crypto Transactions

A press release, issued by The Swiss Financial Market Authority (FINMA) on the first week of February, changes or rather tightens the standards of crypto transaction verification and the overall anti-money laundering regulation in crypto-friendly Switzerland.

What changed

According to Anti-Money Laundering Ordinance (AMLO-FINMA), Switzerland’s FINMA lowers the threshold value for exchange transactions in cryptocurrencies, bringing it from CHF 5,000 (~$5,120) to CHF 1,000 (~$1,025).

That means, that from now on KYC identification will be obligatory for those Switzerland based financial businesses who make or receive crypto transactions starting from CHF 1,000 and up. More to it, the gathered information must be then passed on to The Swiss Financial Market Authority for a review.

Transfers below CHF 1,000 will not demand an identity verification procedure or personal details, so acquiring smaller amounts will not be a trouble.

FINMA adopts the FATF “travel rule”

Similar to the “travel rule” of the Financial Action Task Force’s (FATF) established last year, the Switzerland’s new FINMA proposal also requires collecting and sharing the necessary client information between crypto exchanges on transactions over the limit of $1,000.

By adopting stricter, international AML standards FINMA says that it acknowledges the higher money laundering risks, carried by digital currencies and crypto industry.

Would it be a major hit for Switzerland exchanges? As the new guidelines will be implemented sometime during this year, the number of crypto transactions in Switzerland are likely to fall. However, it only means that the ecosystem needs time to adapt and evolve to a new level of AML controls.

Public consultations on the follow-up regulation are going to be run by FINMA up to 9 April 2020.