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Finma: “the blockchain poses new risks”

The Swiss Financial Market Supervisory Authority, FINMA, has published a new financial risk report, which also includes the blockchain and cryptocurrencies.

The FINMA Risk Monitor 2019 provides an overview of what is considered to be the major risks currently faced by the bodies supervised by the authority, and the results of the supervisory activity itself.

The main risks identified are six:

  1. the persistent context of low-interest rates;
  2. a possible correction in the real estate and mortgage market, particularly in the real estate investment segment;
  3. cyber-attacks;
  4. a disorderly abolition of the LIBOR reference interest rates;
  5. money laundering;
  6. increased barriers to cross-border market access, in particular in the EU.

To these have been added the financial risks arising from climate change as one of the most important long-term risks. 

The fifth point, on money laundering, also directly concerns the blockchain. 

The document reads as follows: 

“The Swiss financial centre is a leading global crossborder wealth management hub for private clients. This makes it particularly exposed to moneylaundering risks”.

[…] As a result of shrinking margins, financial institutions may take the commercial decision to pursue relationships with profitable new clients from relatively high-risk emerging market nations where there is a significant threat of corruption.

[…] This is inspite of the fact that many institutions have further improved their money-laundering prevention in recent years, are increasingly identifying suspicious clients and reporting them to the Money Laundering Reporting Office Switzerland (MROS)”.

[…] In addition to these traditional money-laundering risks, the financial industry also faces new risks in the area of blockchain technology and the cryptoassets that are attracting growing interest from clients.

Although these new technologies promise efficiency improvements in the financial industry, they also accentuate the threats posed by money laundering and the financing of terrorism due to the greater potential anonymity they involve, as well as the speed and cross-border nature of the transactions.

Malpractice by the financial institutions active in FinTech could significantly damage the reputation of the Swiss financial centre and slow down the development of digitalisation”.

The document says no more, so it does not reveal any details on how blockchain and crypto assets can actually introduce new money laundering risks

According to LegalTech’s experienced lawyer Lars Schlichting, CEO of Poseidon Group, the risks raised by FINMA are real. When asked if the blockchain could reduce these risks, he noted that it would take the regulators time to fully understand how these new technologies work and how these risks could be mitigated.

Therefore, it is possible that the lack of detail is simply due to the lack of cases examined and that it will take time to reach concrete and operational conclusions in this regard. 


Marco Cavicchioli
Marco Cavicchioli
Born in 1975, Marco has been the first to talk about Bitcoin on YouTube in Italy. He founded ilBitcoin.news and the Facebook group" Bitcoin Italia (open and without scam) ".