ECUREX GmbH announced recently that it has become the first digital currency exchange platform to be fully compliant with the Swiss Banking Act. After sixteen months of investigation, the Swiss Financial Market Supervisory Authority (FINMA) released back on May 19th 2015 an opinion letter according to which ECUREX’s business model is compliant with the Swiss Banking Act.
Commitment to compliance and industry best practice characterizes the reputation and credibility of ECUREX, which has also been the first digital currency exchange platform to be compliant with the Swiss Anti-Money Laundering Act since April 2014.
So how does this compare with Switzerland’s other known bitcoin and digital currency exchange, SBEX? LeapRate reported last June on SBEX, an acronym for Swiss Bitcoin Exchange, which had just been authorized by Swiss national financial regulatory authority FINMA. According to conversations we conducted with ECUREX, there stands some pretty stark differences…
SBEX and ECUREX operate as two completely different business models
CEO of ECUREX Paolo Tasca relayed to LeapRate that “…ECUREX and SBEX business models are very different. According to our knowledge, SBEX offers brokerage and OTC exchange services. They directly trade with their customers at a quoted price. This is great because it represents a simple and relatively fast way to purchase Bitcoin. SBEX offers instant transactions with cash, within 1 hour via instant bank transfers and 1 day via SEPA.
…ECUREX in contrast from SBEX is not a money transmitter or a gateway to buy bitcoin for investments or other payment needs. Instead, ECUREX targets high-frequency professional traders and financial institutions. In particular, speculators, hedgers and arbitrageurs who wants to trade between different digital and fiat currencies (crypto-crypto and crypto-to-fiat). Therefore, ECUREX operates a realtime electronic trading platform where different currency pairs are quoted in real-time and trading orders are executed by matching them in the order book (immediately if orders are executed at market price or when specific conditions are met in the case of limit orders). The ECUREX electronic trading platform offers the same features and standards of traditional Forex electronic trading systems.
To be fully legitimized and authorized to operate in Switzerland, a financial intermediary must undergo a 2-stage compliance process: first with the Swiss Anti-Money Laundering Act, AMLA and second with the Swiss Banking Act.
Notice that, the Swiss Financial Market Supervisory Authority (FINMA) is an independent government body that is endowed with supreme authority over the financial markets and reports directly to the Swiss parliament. FINMA received the mandate from the parliament to apply the current banking/financial laws, ordinances, directives and regulations also to Bitcoin-related businesses.
FINMA analyses the different business models and decides case by case whether they comply with the Swiss AMLA and with the Swiss Banking Act. ECUREX has been compliant with the Swiss AMLA since April 2014, well before SBEX. ECUREX indeed, has been the first bitcoin-related financial intermediary complying with the Swiss AMLA.
Mr. Tasca further stated: But the compliance with AMLA is only the first stage. The second and more difficult stage is the compliance with the Swiss Banking Act because generally a banking license is required.
On May the 19th FINMA issued an opinion letter in which they clearly state that ECUREX’s business model is compliant with the Swiss Banking Act. Therefore, ECUREX is fully legitimised / authorised to operate in Switzerland even without a banking license. To our knowledge, SBEX is neither a bank, nor FINMA issued any opinion letter (or similar document) in which they claimed that SBEX business model complies with the Swiss Banking Act.”
ECUREX CEO’S Thoughts on Bitcoin in Switzerland
Given Switzerland’s reputation within banking and high finance, I wanted to get ECUREX’s thoughts on the general feeling towards the digital currency infrastructure within the country. Paolo Tasca, CEO of ECUREX said the following: “On the one side the Swiss financial market is one of the most and better regulated in the world with a strong currency. On the other side, science and technology in Switzerland play an important role in the economy (for several years Switzerland has been voted the world’s most innovative country according to the Global Innovation Index developed by the French business school Insead). The combination of these two elements represents an extraordinary environment that favours the development of the FinTech community. Bitcoin-related (or better, blockchain-related) ventures represent a relevant portion of this community by holding attractive opportunities for any party involved in the digital transformation of both financial and non-financial sectors (e.g., payment, remittance, trading, decentralized databases, asset record keeping and transfer, intellectual property ownership, data storage).”
Over the past two years, dozens of digital currency exchanges opened all over the world. Most of the remaining companies today are located in jurisdictions with lax Bitcoin regulatory environments. Regulation in Switzerland is stricter than in other countries as stated from the ECUREX CEO, because it considers digital currencies like Bitcoin equivalent to any other foreign currency. This means that the professional operation of Bitcoin trading platforms constitutes financial intermediation with the requirement to comply with both the Banking Act and the Anti-Money Laundering Act. Mr. Tasca concluded: “We think a stable regulatory environment is not only beneficial for us in the long-term, but also for our customers.”
It should be noted that the ECUREX trading system is not yet operating but the team announced that this is the next important milestone. ECUREX’s trading system aims to ensure the safest online trading experience for professional traders and financial institutions and its first release is scheduled, however no specific date was mentioned.
To learn more about ECUREX, click here.