One of the benefits of cryptocurrency is the fact that it allows a greater deal of anonymity compared to fiat currency transactions. This is particularly true for cryptocurrencies such as Monero which are virtually untraceable and while this has allowed many consumers with legitimate means to transfer money with ease, it has also been exploited by those with more nefarious reasons. As cryptocurrency becomes more mainstream, governments are requiring crypto firms and exchanges to put in stricter measures for the identification of customers so as to prevent the misuse of cryptocurrency.
On September 7, 2020, the Swiss Financial Market Supervisory Authority put in a new regulation that lowered the threshold for unidentified crypto transactions to roughly a thousand dollars as part of an anti-money laundering measure.
On January 1, 2020, the Financial Services Act and Financial Institutions Act had been introduced and FEMA has announced that they will be holding a follow-up consultation on April 9, 2020, even as the laws continue to evolve.
One of the biggest evolutions is the normalization of Swiss financial regulations to be in line with the Financial Action Task Force’s new directives from June 2019. These are a part of a global plan to create a structure that prevents money laundering and these will apply to the cryptocurrency industry as well. In Switzerland, cryptocurrency exchanges must now collect information including, identification, of anyone who wishes to carry out a crypto transaction that is above $1,000. This means that the transactions can be traced back to a single person and in the event of them being used for criminal activities, they can be apprehended. In a press release from the FINMA, they acknowledge that there is a heightened risk of money laundering when it comes to crypto transactions and this is one of the reasons for this law.
Over time, there has been criticism of cryptocurrency for being a possible tool to aid money laundering and other criminal activities but with the sort of laws being passed worldwide, it seems this issue is being mitigated.