Swiss Market Watchdog Approves First Regulated Crypto Fund for Investors

Switzerland’s financial market watchdog announced that it had approved the first regulated cryptocurrency fund in the country.

The Swiss Financial Market Supervisory Authority (FINMA) disclosed on Wednesday, September 29, that it had granted the launch of the Crypto Market Index Fund, according to Swiss law.

The market regulator further stated that the Crypto Market Index Fund would be restricted to qualified investors investing majorly in cryptocurrencies or digital assets with “sufficiently large trading volume” running on the blockchain or distributed ledger technology.

The FINMA classified under other funds for “alternative investments” with particular risks and stated that it would require investors to invest only through established counterparties based in a member country of the Financial Action Taskforce and are subject to corresponding Anti-Money Laundering regulations.

The Crypto Market Index Fund is launched by Swiss asset management firm Crypto Finance AG and is administered by investment management firm PvB  Pernet von Ballmoos AG. At the same time, custody is offered by regulated custodian SEBA Bank AG.

Crypto Finance AG said that the crypto fund would track the performance of the Crypto Market Index 10, a product administered by the Swiss market index under the SIX Swiss Exchange.

“The objective of the Crypto Market Index 10 is to reliably measure the performance of the largest, liquid crypto assets and tokens and to provide an investable benchmark for this asset class,” crypto Finance stated.

Besides that, FINMA has granted SEBA bank permission to provide digital assets to Swiss-domiciled mutual funds.

Announced on Wednesday, FINMA granted SEBA bank a license set to allow the bank to act as a custodian bank and offer liquid investment funds with cryptocurrencies.

SEBA Bank CEO Guido Buehler talked about the development and said that the license would attract more investment.

“This collective investment scheme license allows institutional clients, and then later retail clients, to invest into crypto assets on a liquid basis through fund structures,” Buehler said.

Swiss Crypto Adoption on The Rise

The development by The Swiss Financial Market Supervisory Authority (FINMA) to grant more regulatory approval for cryptocurrency investment instruments not only signals cryptocurrency adoption continues to gain momentum in Switzerland. Still, it marks a milestone for the progressive step towards approving a Crypto ETF in the country.

The Swiss financial market regulator embraces a more flexible approach to cryptocurrency than authorities in several other countries.

As a result, Switzerland is among the leading countries in terms of crypto adoption in Europe.

The FINMA approved many similar asset-oriented products in the recent past, with firms such as CoinShares and 21Shares have unveiled multiple exchange-traded products on the SIX Exchange.

In September 2020, the Swiss authorities started allowing local companies and citizens based in Zug to pay their taxes in either Bitcoin or Ethereum.

This year, FINMA granted permission to the Swiss bourse to develop an exchange dedicated to digital token offerings in mid-September this year.

Overall, Switzerland has been considered as a “crypto valley” s several industry firms are drawn to the jurisdiction over its friendly cryptocurrency and blockchain regulation.