Crypto banks, custody, staking and crypto funds

The licences of August 2019

On 26 August 2019 FINMA granted banking and securities dealer licences to two newly founded institutions specialising in crypto-assets and Digital Assets: SEBA Crypto AG in Zug and Sygnum Bank AG in Zurich. Both licences were subject to conditions that had to be fulfilled before the start of regulated operations.¹ Sygnum, founded by Manuel Krieger, Mathias Imbach and Luka Müller-Studer and based at the Uetlibergstrasse in Zurich, presented itself as the first bank of its kind worldwide. Its business comprised institutional custody of crypto-assets, a gateway between fiat currencies and crypto-assets, trading and liquidity services for major cryptocurrencies such as Bitcoin and Ether, the tokenisation of assets and banking services for other financial institutions. The group later established entities in Singapore and in Abu Dhabi.²

SEBA had been founded only seventeen months before the licence, raised CHF 100 million in a financing round in September 2018 and began operations in early October 2019 under its chief executive Guido Bühler. Its services covered custody, trading, liquidity management, wealth management and tokenisation for professional and institutional clients and for blockchain companies. The bank later adopted the name AMINA Bank AG.³ In FINMA's own summary of the year, the authority recorded that it had granted two blockchain financial service providers a licence to operate as a bank and securities dealer in late August 2019.⁴

The significance of the two licences went beyond the institutions themselves. They demonstrated that Swiss banking law, applied with technological neutrality, could accommodate banks whose principal business was crypto-assets and Digital Assets. They also created a group of counterparties to which established Zurich banks could turn when their own clients began to ask for exposure to Bitcoin and Ether. Several private banks and cantonal banks chose to offer crypto trading and custody to their clients through cooperation with one of the specialised banks, avoiding the need to build the technology and the custody infrastructure themselves. In this way the crypto banks became part of the division of labour on which the Zurich financial centre has always relied.

Custody of crypto-assets under banking law

The regulatory treatment of crypto custody depends on the form in which assets are held. Where each customer's assets are held on an individual blockchain address attributed to that customer, the custodian does not accept deposits within the meaning of banking law, and no banking or fintech licence is needed for that reason alone. Where crypto-assets are held collectively for several customers, for example in an omnibus wallet, the position changed with the DLT Act. Collective custody of crypto-based assets is treated like the acceptance of deposits unless the assets are segregated in bankruptcy under Article 16 of the Banking Act and Article 242a of the Federal Act on Debt Enforcement and Bankruptcy. Where segregable crypto-based assets that are used largely as means of payment are held in collective custody, FINMA's fintech licence may be required even where no fiat money is involved.⁵

The distinction has practical significance for the choice of structure. A custodian that holds crypto-assets on customer-specific addresses and keeps them available at all times can operate under the self-regulatory regime of the Anti-Money Laundering Act. A custodian that pools assets, lends them or uses them for its own account moves into the territory of banking law. Clients of Zurich law firms who plan to offer custody services therefore begin with a technical question about the architecture of their wallets before they reach the legal questions.

Staking and Guidance 08/2023

The rise of proof-of-stake blockchains raised a new question for Swiss custodians. Staking involves locking crypto-assets in a protocol in order to participate in the validation of transactions and to earn rewards. Two features of staking threatened the segregation of the assets in bankruptcy: lock-up periods, during which the assets cannot be withdrawn at once, and slashing, the protocol-imposed loss of part or all of the staked assets when a validator misbehaves. If a custodian could not return the assets at all times, it was doubtful whether the conditions of Article 242a were met.

FINMA addressed the question in Guidance 08/2023 of 20 December 2023. It concluded that staked crypto-assets can be segregated from the bankrupt estate and returned to custody account customers, provided that certain conditions are met. Supervised institutions must implement documented measures to limit the risks, disclose them transparently to customers and inform them that staking may lead to the loss of assets. If these conditions are met, the provision of staking services does not lead to capital charges.⁶ The guidance distinguishes between direct staking, where the custodian itself controls the withdrawal keys, and staking delegated to third parties. In the first case the custodian must obtain explicit client instructions on the assets and amounts to be staked, attribute the staked assets clearly to the validators and prepare a Digital Assets Resolution Package. In the second case the bank must conclude fiduciary agreements, ensure that the third party is subject to prudential supervision and operates in a jurisdiction offering equivalent protection, and verify that the third party holds the withdrawal keys and validator records.⁷

The staking guidance is typical of the Swiss method. FINMA did not wait for legislation. It interpreted the existing insolvency rules in the light of a new technical practice and set conditions under which the practice fits within them. The result gave Swiss banks the legal certainty to offer staking to their clients at a time when regulators in other jurisdictions were still debating whether staking services should be permitted at all.

Crypto funds

Collective investment schemes investing in crypto-assets and Digital Assets presented a further test for technological neutrality. On 29 September 2021 FINMA approved the first Swiss crypto fund, the Crypto Market Index Fund. It was authorised as an “other fund for alternative investments” with particular risks and restricted to qualified investors. FINMA required the fund to invest only in established crypto-assets with sufficiently large trading volumes, to carry out transactions only through established counterparties and platforms in member countries of the Financial Action Task Force with anti-money-laundering regulation, and it set specific requirements for risk management and reporting by the fund management company and the custodian.⁸

Crypto funds under Swiss law remain a niche. The more important channel for Swiss investors has been exchange-traded products listed on SIX Swiss Exchange, which offer exposure to Bitcoin, Ether and baskets of other tokens in the form of structured products. Since 1 March 2024 the new category of the Limited Qualified Investor Fund, which does not require FINMA approval, has offered an additional vehicle for crypto strategies directed at qualified investors.⁹ The treatment of collective investment schemes generally is discussed in Part H.

Notes

CapLaw, “FINMA Grants Banking Licenses to New Swiss Crypto Banks, Introduces New Strict AML Rules regarding Payments on Blockchain”, 2019, https://caplaw.ch/2019/finma-grants-banking-licenses-to-new-swiss-crypto-banks-introduces-new-strict-aml-rules-regarding-payments-on-blockchain/. ↩
Sygnum, “Sygnum, digital asset technology group, receives FINMA banking and securities dealer licence”, 26 August 2019, https://www.sygnum.com/news/sygnum-digital-asset-technology-group-receives-finma-banking-and-securities-dealer-licence/. ↩
AMINA Bank, “FINMA licence received”, 26 August 2019, https://aminagroup.com/press/finma-licence-received/. ↩
FINMA, “Innovation and supervision 2019”, dossier, https://www.finma.ch/en/documentation/dossier/dossier-fintech/innovation-und-aufsicht-2019/. ↩
Schellenberg Wittmer, “Legal Technology: Regulation and Licensing of Crypto Custodians in Switzerland”, 8 May 2025, published on Mondaq, https://www.mondaq.com/fin-tech/1621880/legal-technology-regulation-and-licensing-of-crypto-custodians-in-switzerland. Under Article 5a of the Banking Ordinance, the crypto-based assets covered by Article 1b of the Banking Act are those held in collective custody within the meaning of Article 16 number 1bis letter b of the Banking Act and used to a large extent as means of payment. ↩
FINMA, “FINMA publishes guidance on staking services”, 20 December 2023, https://www.finma.ch/en/news/2023/12/20231220-meldung-am-staking/. ↩
Homburger, “FINMA Issues Guidance on Staking Services”, 20 December 2023, https://www.homburger.ch/en/insights/finma-issues-guidance-on-staking-services. ↩
FINMA, “Approval of first Swiss crypto fund”, 29 September 2021, https://www.finma.ch/en/news/2021/09/20210929-mm-genehmigung-schweizer-kryptofonds/. FINMA again invoked the principle of “same risks, same rules”. ↩
FINMA, “Limited Qualified Investor Fund: Neue Fondskategorie ohne Bewilligung und Aufsicht der FINMA”, 23 February 2024, https://www.finma.ch/news/2024/02/23240223-meldung-l-qif. The L-QIF was introduced by an amendment of the Collective Investment Schemes Act in force since 1 March 2024. It requires neither approval nor supervision by FINMA but must be managed by institutions supervised by FINMA. ↩

For general information only. This article does not constitute legal or tax advice, does not replace advice on an individual case and creates no lawyer-client relationship. It reflects the legal position as of September 2025.

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Dr Alexander Ressos, TEP

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