FinTech: progress and status report 2020

In the past few years, a key priority for FINMA has been dealing with enquiries in connection with FinTech-based business models. In 2020 alone it conducted around 100 preliminary investigations in this context. A substantial driver for this was the large number of initial coin offerings (ICOs) in Switzerland.

In an ICO, investors typically transfer assets to an ICO organiser and receive newly created blockchain-based tokens in return. FINMA recently noticed a certain decrease in the number of such offers. In addition, it tended to receive fewer reports of FinTech service providers who might be operating without authorisation. This decreasing trend is probably due not least to the fact that those active in the FinTech sector are now more familiar with the legal parameters for such offerings. FINMA was therefore able to complete the majority of outstanding investigations. To ensure that the requirements of financial market law are met in the FinTech sector, FINMA closely supported the providers concerned in implementing measures or ordered such measures as part of enforcement proceedings.

Business models involving blockchain technology still attract considerable interest among investors. Dubious financial market players continue to take advantage of this by launching corresponding offers and often recruiting customers via an internet presence. Typically, they try to mislead investors into investing in cryptocurrencies under false pretences involving companies and products that do not exist. If such financial market players are known to FINMA, it includes them on its warning list and thereby alerts investors. It also consults with domestic criminal authorities and foreign supervisory authorities in this regard. In the year under review, 140 financial market players were placed on the warning list.

(From the Annual Report 2020)