Advisory services regarding Bitcoin and other virtual currencies
Virtual currencies create new business models – but they also raise questions with regards to regulation
Deloitte supports you with your analysis and the implementation of the regulatory requirements applicable to your business model
The economic impact of virtual as opposed to traditional currencies is still comparatively small, however, Bitcoin offers innovative companies a number of new business models.
According to its report (Federal Council report on virtual currencies in response to the Schwaab (13.3687) and Weibel (13.4070) postulates) dated 25 June 2014 the Swiss Federal Council will refrain from drafting legislation respectively adopting regulation with regards to virtual currencies and refers to the application of existing laws. The report states that contracts, where payments are made in a virtual currency, are generally enforceable and criminal acts related to Bitcoin can be persecuted.
Depending on the business model certain requirements of current financial markets regulation may be applicable. Due to the fact that Bitcoins are not considered securities as defined by the Swiss Stock Exchange Act it is not applicable to the trading of virtual currencies. However, depending on the use of Bitcoin in the business operation, the Swiss Banking Act may be relevant and an authorization by the Swiss Financial Market Supervisory Authority may be required. Additionally, specific transactions may be in the scope of the Money Laundering Act. As a result there may be an obligation to identify the counterparty as well as the economic beneficiary. It is the responsibility of management to obtain any necessary approvals from the Swiss Financial Market Supervisory Authority. Any unauthorized operations may lead to the liquidation of the company in question and a sanction for violating regulatory licensing requirements.
Deloitte’s advisory service covers the analysis of your specific business model (e.g., purchase or sale of Bitcoins, operation of a trading platform) and the evaluation of the applicability of the particular legislation. The focus is on the evaluation of the qualification as a financial intermediary. A financial intermediary is among others a natural person or a legal entity, which accepts assets from third parties, safeguards these assets or assists in investing or transferring these assets as part of its business operations. In this case the provisions of the Money Laundering Act have to be applied and the owner has to either become a member of a self-regulating organisation or obtain a license as a financial intermediary from the Swiss Financial Market Supervisory Authority prior to taking up any business operations. In addition we can also support you with obtaining all the necessary authorisations as well as the compilation of the required documentation.