Bity Challenges FINMA’s Rules on Bitcoin ATMs in Switzerland
– Bity, a Bitcoin ATM operator in Switzerland, has launched a legal challenge against the Financial Market Supervisory Authority (FINMA) over its tightening know-your-customer (KYC) rules.
– FINMA now requires users of Bitcoin ATMs to undergo a KYC check if they transact more than 1,000 francs over a 30-day period.
– Bity argues that this regulation is undemocratic and that it should be up to self-regulatory organizations (SROs) to define how members implement anti-money laundering laws.
– The company has raised almost 20,000 Swiss francs through crowdfunding to support its legal challenge.
– Bity’s complaint highlights the regulatory gray area and the automatic adoption of rules by SROs based on FINMA’s soft power.
FINMA’s Stance
– FINMA defended its decision to tighten KYC rules, citing international standards and high money laundering risks associated with cryptocurrency ATMs.
– The regulator referenced media reports on the misuse of cryptocurrency ATMs by drug trafficking networks as concrete evidence.
– Self-regulatory organization VQF did not respond to comment requests on the matter.
Bity’s Criticisms
– Bity’s chairman, Alexis Roussel, criticized FINMA for changing the rules without conducting a thorough analysis and ignoring opposition from respondents during the consultation process.
– Roussel questioned the authority of the Financial Action Task Force (FATF) to influence Swiss regulations, calling it a non-democratic system.
– He also disputed FINMA’s claims of cryptocurrency ATMs being used by drug traffickers, stating that they were based on sensationalist media reporting and outdated information.
Closing Thoughts
Bity’s legal challenge against FINMA’s rules highlights the ongoing tension between regulators and the crypto industry. The company argues that the regulations are unfair and undemocratic, while FINMA maintains that they are necessary to combat money laundering risks. This case raises important questions about the power dynamics between regulators and self-regulatory organizations, as well as the influence of international bodies like FATF. The outcome of this legal challenge could have significant implications for the future of Bitcoin ATMs in Switzerland and potentially impact regulatory approaches in other jurisdictions.
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