More than 250 people from the private and public sectors met at the end of October in Zug to discuss the fight against the use of virtual currencies for criminal purposes. In Switzerland, more and more suspicions of money laundering linked to cryptocurrencies are being transmitted to the authorities.
“We have gained extensive experience in combating financial crime and money laundering in the traditional market. However, we are lagging behind criminals in the area of cryptocurrencies,” says Christoph Gnägi, spokesperson for the Federal Police Office (Fedpol), questioned by RSI.
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“Crime never sleeps”
Alongside their completely legal use, cryptocurrencies are also used “for the most diverse illicit purposes, ranging from theft and fraud to the most serious forms of international crime such as money laundering and financing of terrorism”, note Fedpol at the end of the Zug symposium. “Crime never sleeps,” adds the federal police.
The use of virtual currencies by criminals is a global phenomenon, notes Christoph Gnägi. As Switzerland is one of the world leaders in cryptocurrencies, it is obviously not spared: “the Crypto Valley of Zug” is known worldwide and other regions, such as Lugano, Neuchâtel or Geneva, are also emerging in this sector.
>> Read also: In Geneva, Neuchâtel, Zug or Lugano, Switzerland dreams of itself as a cryptocurrency paradise
More and more announcements of suspicious transactions
While there were only a handful a few years ago, reports of suspicious transactions in Switzerland are now a daily occurrence. Last year, 14.5% of suspicious activity reports relating to money laundering or terrorist financing concerned cryptocurrencies, according to the 2023 annual report of the Money Laundering Reporting Office (MROS).
>> Read also: Cryptocurrencies increase the risks of money laundering and terrorist financing
In Switzerland, the number of financial intermediaries in the field of virtual assets has exploded in recent years, from less than 10 in 2018 to more than 200 by the end of 2022. These entities are crucial in the fight against crime, particularly in matters of international cooperation, underlines Christoph Gnägi. “Switzerland has integrated international cooperation into its legal framework and aligns itself with the standards of the FATF, the Financial Action Task Force.”
A challenge for the world of finance
A sign of the difficulties that virtual currencies pose to the world of finance, in terms of “compliance”, respect for standards, the Banque cantonale neuchâteloise (BCN) recently decided to no longer accept clients active in cryptocurrency trading. “The constraints in terms of resources and financial means are too great to allow us to continue,” explained the director of the establishment Pierre-Alain Leuenberger in Le Temps.
While Neuchâtel is a pioneer in the field of blockchain technology in Switzerland, the turnaround of the BCN has forced some of the main local players to look for a new banking partner outside the canton.
>> Read also: The BCN will limit transactions with cryptocurrencies from June
Regulatory risks could also have repercussions in Lugano. The Ticino city is home to Plan B, a collaboration between the Municipality and Tether, a controversial company active in the virtual currency sector. However, according to the Wall Street Journal, American authorities are investigating Tether for possible violations of sanctions and anti-money laundering rules. Allegations denied by the company’s CEO Paolo Ardoino.
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Francesca Calcagno and John Robbiani, RSI
Adaptation in French: Didier Kottelat
