In a bold move that hinges on regulatory scrutiny, a firm operating 45 Bitcoin ATMs in Switzerland, known as Bity, is challenging the Financial Market Supervisory Authority (FINMA). FINMA, citing drug trafficking concerns, tightened regulations on Bitcoin ATMs compelling users to reveal their identity for transactions exceeding 1,000 Swiss francs. In what can be seen as an ‘against-the-grain’ gesture, Bity has started a crowdfunding campaign to assist in legal expenses, rallying supporters with a startling call to arms, “FINMA is fighting crypto! We are fighting back!”
The upset stems from the new know-your-customer (KYC) rules, which Bity perceives as overbearing and implemented in an undemocratic manner. The company’s complaint highlights a nebulous area in the regulatory background. It emphatically points out that FINMA-licensed entities do not encompass money transfer-style businesses. As per Bity, it should fall upon self-regulatory organisations (SROs) like VQF to decide how best to deploy anti-money laundering laws among their members.
However, FINMA’s immense influence has led SROs to incorporate these new regulations, resulting in what Bity refers to as an unchallenged ‘echo chamber.’ The company argues that money transfer companies are already subjected to due diligence commitments under the Anti-Money-Laundering Act (AMLA).
In defense of its decision, FINMA referenced not only the international standards set by organizations like the Financial Action Task Force (FATF) but also the high risk of money laundering linked to services like those provided by Bity. Providing further context for the stricter regulations, FINMA cites instances where cryptocurrency ATMs in Switzerland have been misused by drug traffickers.
Despite FINMA’s rationale, Bity’s CEO Alexis Roussel contends that this decision was made without proper analysis and largely ignored the feedback from a consultation, revealing unanimous opposition to the proposed change. He also took aim at the FATF, calling it an undemocratic system without jurisdiction in Switzerland. Further, Roussel dismissed the allegations of cryptocurrency ATM misuse for drug trafficking as sensationalist media reports.
Undeterred by these regulatory measures, Roussel stands firm in his belief that the crypto industry “won’t be pushed around” and foresees a future where the industry manages to counterbalance established institutional powers. His assertive stance certainly adds a new layer to the dialogue surrounding cryptocurrency regulation, ultimately leaving the resolution of this tension between individual freedom and regulatory security in unknown territory.
Source: Coindesk
