Switzerland’s Financial Market Supervisory Authority, the country’s principal financial regulator, has made an “unfavorable prognosis” regarding Bitcoin Suisse’s application for a banking license.
According to an official announcement on Wednesday, Bitcoin Suisse’s current application is ineligible for approval on the grounds that “various elements that are relevant under licensing law make it unlikely that a license will be granted.” As such, Bitcoin Suisse has decided to withdraw its application.
Speaking to Cointelegraph, Bitcoin Suisse CEO Arthur Vayloyan remained optimistic, stating that the firm still has “so many options on the table.” He explained that the firm’s reputation for cryptocurrency storage and trading has put it in an ideal position as institutional adoption of digital assets grows exponentially.
Vayloyan explained that since the firm had initially applied for the license in July 2019, the landscape of crypto markets and the firm’s position therein has shifted significantly and that Bitcoin Suisse could apply again, should it want to.
Indeed, a banking license could be advantageous as security tokens gain traction.
As Vayloyan explained, in February 2018, FINMA released guidelines for initial coin offerings, under which tokens were divided into three categories: payment, utility and asset, with the latter considered a security. Today, when a firm receives a banking license in Switzerland, it also automatically receives a broker-dealer license. Consequently, a firm with a banking license would be able to engage in the purchase and sale of securities, giving them a leg up in the emerging digital securities space.
“Under the assumption that the security token market takes off, it would be strategically a pity not to be able to fully participate in that unfolding opportunity and take a share,” Vayloyan said.
While FINMA stated that there were apparent weaknesses in “money laundering defense mechanisms” in Bitcoin Suisse’s application, Vayloyan stated that the firm is aware of any gaps in this regard and is working closely with regulators to address them. “We are as transparent to regulators as we can be,” he stated.
Bitcoin Suisse is a crypto broker and intermediary headquartered in Switzerland’s canton of Zug, which is dubbed “Crypto Valley” for its preponderance of cryptocurrency- and blockchain-related companies, and progressive regulatory approach toward digital assets.
Earlier this year, Bitcoin Suisse rolled out a payments solution that allows residents of the canton to pay their taxes in cryptocurrency. Projects with local companies and government along with the soaring bull market have grown the firm’s workforce by 120 people in the past year.