Cryptocurrency adoption continues gaining momentum in Switzerland as local financial authorities grant more regulatory approvals for crypto investment instruments.
On Wednesday, the Swiss Financial Market Supervisory Authority (FINMA) approved the Crypto Market Index Fund as the “first crypto fund according to Swiss law.” It was launched by Swiss asset manager Crypto Finance and managed by investment management firm PvB Pernet von Ballmoos AG with custody provided by SEBA Bank AG.
The Crypto Market Index Fund is restricted to qualified investors and classified under “other funds for alternative investments”, the Swiss Financial Market Supervisory Authority (FINMA) said in a statement. Crypto assets are based on blockchain or distributed ledger technology. “In order to facilitate serious innovation, FINMA applies the existing provisions of financial market laws in a consistently technology-neutral way,” it added, thus ensuring that new technologies are not used to circumvent existing rules.
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CryptoMarket Index Fund may only invest in leading cryptocurrencies whose trading volumes are “sufficiently large.” The fund will track the performance of the Crypto Market Index 10, administered by 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 noted.
In addition, FINMA said it would require investors to invest only through counterparties based in member countries of the Financial Action Task Force and subject to corresponding anti-money laundering regulations.
FINMA also approved SEBA Bank AG as an institutional custodian service, granting the firm a CISA license at the same time as the fund approval. In September, the authority permitted SIX Swiss Exchange to launch a digital marketplace and central securities depository based on distributed ledger technology.