The Swiss Federal Assembly Approved A Motion For Crypto Regulation

Just a day ago, the Swiss Federal Assembly approved a motion that was directed to the Federal Council in order for it to regulate cryptocurrencies. Switzerland as previously reported in our crypto news is known to be one of the best blockchain hubs in Europe after the development of the popular city of Zug being called the Crypto Valley.

The motion was directed by Giovanni Merlini who is the Liberal Assemblyman and instructed the Federal Council on how to adapt the existing legislation for cryptocurrencies and to go over the possible associated risks. The council approved the motion with 99 votes in favor and 10 abstentions.

This decision is a first step towards solving issued like money laundering, fraud, and extortion. While problems like these emerge as a problem in the fiat currency system, the fiat currency system has extremely harsh regulations that allow the government to prosecute criminals and to sanction any unfair practices such as price manipulation or fraudulent market activity.

On the other hand, on the crypto market, there is no such regulation which allows the market holders to apply illegal price manipulation methods and not to get sanctioned at the end. The volatility of cryptocurrencies in the past was largely attributed to price manipulations as mentioned. While the ‘’whales’’ use these methods and tactics by placing a huge buy order to create a boom on the market, the crypto scams are much more difficult to prosecute because cryptocurrencies are not recognized as legal tender.

For example, money laundering is one of the biggest problems for regulators because it is the easiest one to do. The obtained funds can be cashed out of a BTC ATM, exchanged for privacy coins on decentralized exchanges or multiple other tactics. Also, ICOs that are not regulated are another tunnel for money laundering.

The decision to regulate the market comes after the idea to better understand the risks that come out by using crypto as well as how entities trade but also to learn more about market supervision and financial intermediaries.

The banks are getting worried that the regulators accept crypto with their arms wide open since the Swiss minister of Economy Johann Schneider-Ammann stated that Switzerland aims to become a ‘’Crypto Nation.’’