The Swiss Financial Market Supervisory Authority (FINMA) has published a new supervisory communication outlining how it assesses the risks associated with the custody of crypto-based assets.
The communication sets out the requirements institutions must meet to ensure the secure safekeeping of such assets.
FINMA notes growing interest in crypto-based assets and related services within the Swiss financial market.
An increasing number of customers wish to trade, invest in, and securely store cryptocurrencies.
In response, FINMA-supervised institutions have expanded their offerings in these areas.
In the new supervisory communication, FINMA highlights the specific risks involved in the custody of crypto-based assets such as Bitcoin and Ether.
These risks arise from the underlying distributed ledger technology. Mitigating them requires specialised expertise and robust technical infrastructure.
Where custody services are provided abroad, additional legal complexities may arise, particularly in the event of the custodian’s insolvency.
In such cases, it must be ensured that customers’ crypto-based assets do not form part of the custodian’s insolvency estate.
FINMA’s communication makes clear that the secure custody of crypto-based assets requires appropriately supervised service providers, both in Switzerland and internationally, as well as clear rules to protect customers in the event of insolvency.
Responsibility for the selection and use of such providers remains with the licensed financial institutions.
Featured image credit: Edited by Fintech News Switzerland, based on image by luckystep via Freepik
The post FINMA Outlines Custody Requirements for Crypto-Based Assets appeared first on Fintech Schweiz Digital Finance News - FintechNewsCH.
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