Although Johann Schneider-Ammann Swiss Economics Minister was quoted a while back during the crypto finance conference saying Switzerland is doing its best to become the crypto nation, the recent developments are contradicting his statement. Legislatures have just approved a motion to place the crypto sector under regulations. Besides Ammann, the legislature’s actions also put aside comments from the Jörg Gasser Swiss Finance Minister.
Per the ruling, Giovanni Merlini Liberal Assemblyman has been tasked with the responsibility of instructing the Federal Council on how they will go about in drafting laws to place digital assets and risks associated with making investments in crypto under regulations.
Reasons behind the Regulations
While citing major challenges that affect the local fiat currency, the legislature based their decision on fraud-related issues, extortion, and money laundering. Digital coins are new and have taken the banking industry like a storm, and while fiat currency has strict regulations in place that help prosecute those who break the law, there is none in the crypto space. Moreover, the fact that it has been proven that recent price surges have been caused by whales manipulating the price of crypto, its high time regulations are put in place to clamp down on the illegal price manipulation activities taking place.
Scammers Can Easily Hide Behind Crypto
While whales take advantages of their financial capability and place a massive sell or buy order to manipulate prices, scammers, on the other hand, have it easy. Through taking advantage of crypto anonymity features, scammers can easily make transactions through placing an order via an OTC trading platform to buy crypto or through an ATM with the aim of laundering the money. To further hide their activities, the criminals will convert their coins into privacy coins available on the market. Similarly, on the other hand, unregulated ICOs can also be used as money laundering schemes, however, since plans are in motion to regulate the sector, the above scenarios will be a thing of the past. Apart from all the above the proposals will also seal the gaps used to extort crypto enthusiast and also help cushion them from risks associated with making investments in digital assets. Alongside implementing all the above, the entity responsible will also look at ways in which players in the crypto sector can be placed in the same bracket as financial intermediaries leading to them having to comply with laws in that sector.