Switzerland’s financial markets supervisor announced Wednesday that it had approved the country’s first fund that invests primarily in crypto assets. The Crypto Market Index Fund is restricted to qualified investors and categorized under “other funds for alternative investments” with particular risks, the Swiss Financial Market Supervisory Authority (FINMA) said in a statement. Crypto assets are based on blockchain or distributed ledger technology.
FINMA said it had tied the approval to specific requirements.
“In order to facilitate serious innovation, FINMA applies the existing provisions of financial market laws in a consistently technology-neutral way,” the financial regulator added, thus ensuring that new technologies are not used to circumvent existing rules. Since crypto-assets involve particular risks, FINMA also noted that it had tied the approval to specific requirements, including that the fund may invest only in established assets with a sufficiently large trading volume. Investments must be made through established counterparties and platforms based in a member country of the Financial Action Task Force and are subject to corresponding anti-money laundering regulations, FINMA said.
Switzerland is among the few countries with legal certainty for the crypto sector.
As reported last year, Swiss lawmakers introduced a new system of laws for regulating crypto and blockchain in the country. The new regulations, passed onto the statute books, come in the form of corporate and finance law amendments, which give blockchain and cryptocurrency a legal footing for the first time. The laws offer first-time definitions for exchange digital securities and also spells out the legal process for the seizure of crypto assets in bankruptcy. Switzerland lawmakers outlined the role of crypto exchanges in the country concerning anti-money laundering policies and other compliance measures.