Swiss markets watchdog approves first crypto assets fund

Switzerland’s financial markets supervisor has announced today, Wednesday, September 29, that it had approved the country’s first fund which will invest primarily in cryptocurrency assets.

The Crypto Market Index Fund is restricted to qualified investors and categorised under “other funds for alternative investments” with particular risks, the Swiss Financial Market Supervisory Authority (FINMA) said in a statement.

Crypto digital assets are based on blockchain or distributed ledger technology.

“In order to facilitate serious innovation, FINMA applies the existing provisions of financial market laws in a consistently technology-neutral way,” it added, thus ensuring that new technologies are not used to circumvent existing rules.

Since crypto-assets involve particular monetary risks, the FINMA said it had tied the approval to specific requirements, one is that the fund may invest only in established assets with a sufficiently large trading volume.

Investments also must be made through established counterparties and platforms that are based in a member country of the Financial Action Task Force and are subject to corresponding anti-money laundering regulations, FINMA said.

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The European Commission (EC) has set out legislation to make crypto assets more traceable, a move which could undermine one of the main use cases for digital currencies – that they provide greater privacy than fiat transactions.

The proposals were unveiled on July 20 this year as part of a four-point package aimed at “beating financial crime” by strengthening the European Union’s anti-money laundering and countering terrorism financing (AML/CFT) rules.