The 'Crypto Valley' of Zug established itself as a leading global hub for ICOs last year (Keystone) - Click to enlarge
Legendary United States crypto investor Tim Draper believes Switzerland has missed the boat in establishing itself as an attractive global hub for blockchain start-ups. Draper has invested in Tezos, which ran into a damaging governance row in Switzerland shortly after its initial coin offering (ICO) fundraiser.
Addressing the Crypto ICO summit in Zurich by Skype link, Draperexternal link said Switzerland had put off investors with heavy-handed regulation. “You [Switzerland] had the tiger by the tail, everyone was going to do their ICOs through you, and all you had to do was make it easier for everybody,” he said.
“Instead, the regulatory bodies got in there, they made it tougher, they put more and more barriers up, so people went to Singapore and Gibraltar and Cayman and to other places,” he added.
“Switzerland had an enormous opportunity and I think they have lost their opportunity. If you have heavy regulation, you lose your business. Maybe they can bring it back by being more regulatory light. Governments now have to compete for us. We can move, we can go from country to country.”
‘Shocker’
Draper did not refer to which specific Swiss regulation has put him off. In recent weeks, the Swiss financial regulator recently issued guidelines on how it would deal with tokens generated by ICOs, classifying some as securities.
However, Draper made specific reference to the Tezos row that only calmed down at the end of January. The project was frozen for several months as a public dispute raged between the creators of the Tezos technology and the president of a Swiss-based foundation set up to house and distribute the $232 million (CHF221 million) generated by the crowdfund last summer.
Draper said the situation had been a “shocker” as it unfolded before his eyes. He had particular issues with the way the foundation controls funds and tokens generated by the ICO and the governance relationship between the non-profit foundation and the for-profit entity under such an arrangement.
But Draper still referred to the ICO fundraising craze that raised $4 billion globally last year – CHF850 million in Switzerland – as “one of the greatest moments in the history of the world” that will transform the world in a more profound way than the internet thanks to blockchain technology.
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