Buying crypto privately is now more difficult for the Swiss, and soon for the rest of the world.
A new provision passed by The Swiss Financial Market Authority (FINMA) has lowered the threshold for unidentified crypto purchases from $5,000 Swiss Francs (CHF) to $1,000 CHF (around $1023 USD), according to a press release by the agency.
Swiss regulators cited “heightened money-laundering risks” as the reason for lowering the threshold.
This comes as part of a global push by governments to tighten the unidentified movement of digital money and financial assets—anonymity features that make cryptocurrencies enticing in the eyes of some users.
The Financial Action Task Force (FATF), an intergovernmental organization with 200 countries, recommended last year that crypto exchanges must collect identification for purchases over $1,000 USD or $1,000 euros.
Last month, The European Union also heightened its restrictions on anonymous crypto transactions when it passed new money-laundering regulations that force cryptocurrency exchanges and custodians to comply with know-your-customer (KYC) and anti-money laundering (AML) procedures, which typically are applied to the banking sector. As a result, popular crypto startups, such as Bottle Pay and Deribit, have decided to either shut down or relocate due to the new regulations.
Countries that don’t comply with FATF’s rules “essentially lose access to the global financial system” Jesse Spiro of crypto investigative firm Chainalysis told Bloomberg last year.
Some think anonymity in mainstream crypto buying is dead. “If you use crypto, you need to get used to the idea [that] anonymity is gone,” the CEO of Coinfirm Pawel Kuskowski told Decrypt earlier this week.
While authorities around the world are increasingly finding ways to dissuade bad actors from using cryptocurrency to circumvent laws, some within the crypto industry have raised concerns about the threats to privacy that these new regulations pose.
The next great Bitcoin battle will be over privacy; the cracks are already starting to show as more companies are closing accounts of people who use privacy preserving services. These companies shall find themselves on the wrong side of history.
— Jameson Lopp (@lopp) January 29, 2020
Companies such as Coinfirm and others are currently working on solutions to help keep crypto businesses, such as exchanges, compliant while providing users with privacy.