Crypto compliance: money laundering, the travel rule and sanctions

The Anti-Money Laundering Act and crypto service providers

The general framework of Swiss anti-money laundering law, described in chapter I.III, applies to crypto-assets without major adaptation. Anyone who, on a professional basis, exchanges crypto-assets for fiat money or other crypto-assets, holds them in custody for others or transfers them on behalf of clients is a financial intermediary under the Anti-Money Laundering Act. Such a firm must either be supervised directly by FINMA or be affiliated with a self-regulatory organisation. Several of these organisations, in particular the VQF in Zug, have developed specific expertise with crypto firms.¹ Banks, securities firms and DLT trading facilities are subject to the FINMA Anti-Money Laundering Ordinance, which was extended to DLT trading facilities with effect from 1 January 2023. The same revision clarified that technical measures must prevent the threshold of 1,000 francs from being exceeded through linked transactions within thirty days, where virtual currencies are exchanged for cash or other anonymous means of payment.²

FINMA regards the sector as one of elevated risk. In its overview of money laundering supervision for 2024 it noted that crypto-assets are often used in cyber attacks and as a means of payment for illegal trade on the dark web, and that stablecoins are increasingly used for illicit transactions, in particular to circumvent sanctions. The money laundering risks for financial intermediaries with a crypto offering can be considerable, and institutions that operate in this area without adequate risk management risk damaging the reputation of the Swiss financial centre.³

The Swiss travel rule

Switzerland introduced the travel rule for crypto transfers earlier and more strictly than most jurisdictions. In its Guidance 02/2019 of 26 August 2019, FINMA stated that information about the client and the beneficiary must be transmitted with transfers of tokens, as with ordinary payments. Because no system for such transmission between providers existed at the time, supervised institutions were allowed to send tokens only to external wallets belonging to their own verified clients and to receive tokens only from such wallets. The Financial Action Task Force permitted exceptions for transfers to wallets not held by a regulated provider. FINMA did not adopt those exceptions, which made the Swiss standard one of the strictest in the world.⁴

In practice this means that a Swiss provider must verify that its client owns or controls an external wallet before sending tokens to it or accepting tokens from it. Accepted methods include a small test transaction from the wallet or a message signed with the private key, which proves control without moving any value. Since 1 January 2021 the identification threshold for exchange transactions in virtual currencies has been 1,000 francs, down from the previous 5,000 francs.⁵ For clients from other jurisdictions, in particular those used to the looser practice of foreign exchanges, the Swiss rules can be surprising. A Swiss bank will refuse to credit tokens from an unverified wallet and will require documentation of the source of funds for crypto wealth, often back to the original acquisition of the tokens several years earlier.

Sanctions exposure

The war in Ukraine brought crypto-assets into the focus of sanctions law. Switzerland adopted the sanctions packages of the European Union against Russia, including restrictions on crypto services. With effect from 26 February 2026, following its decision of the previous day to adopt the EU’s nineteenth package, the Federal Council prohibited financial intermediaries from providing crypto services to Russian nationals, residents and entities. The prohibited services include custody and administration of crypto-assets for clients, the operation of trading platforms, exchange, advice, portfolio management and transfer services. The rouble-backed stablecoin A7A5 may no longer be held, traded or transferred. Transactions through sanctioned crypto platforms are prohibited. Exceptions apply to Russian nationals who hold a residence permit in Switzerland, the European Economic Area or the United Kingdom and live there, and financial intermediaries must report suspected sanctioned crypto connections to the State Secretariat for Economic Affairs.⁶ In May 2026 Switzerland adopted most of the EU’s twentieth package, which targets Russian crypto service providers, decentralised finance platforms and a further rouble stablecoin.⁷

For crypto firms in Zug and Zurich the sanctions create a demanding screening task. A public blockchain records every transfer, so that a provider can see whether tokens have passed through an address associated with a sanctioned platform or person. Blockchain analysis tools allow the provider to assess the risk of incoming transfers. Where tokens arrive from a sanctioned source, the provider will freeze the client’s assets and report to the authorities. The general law of sanctions is described in chapter I.IV. Its application to crypto-assets depends above all on the quality of these analytical tools and on the willingness of providers to act on their results.

Notes

1. Anti-Money Laundering Ordinance (AMLO), SR 955.01, Art. 4 para. 1 lit. b and para. 1bis, bilingual edition, https://www.droit-bilingue.ch/de-fr/9/95/955.01-4-7.html, which treats helping to transfer virtual currencies to a third party as a payment service under Art. 2 para. 3 lit. b AMLA; see also Arts. 12 and 14 AMLA (SR 955.0) on direct FINMA supervision and affiliation with a self-regulatory organisation. On the VQF: 21 Analytics, “VQF’s Insights on Switzerland’s Crypto AML & Travel Rule”, interview with Tobias Eberle and Felicitas Sicardi, 25 August 2026, https://www.21analytics.co/blog/vqf-on-switzerland-aml-travel-rule/ (“More than 150 of our 600+ supervised entities are VASP-related”), and VQF, https://vqf.ch/en/ (seat at General-Guisan-Strasse 6, Zug). ↩
2. FINMA, “FINMA publishes partially revised FINMA Anti-Money Laundering Ordinance”, media release, 2 November 2022, https://www.finma.ch/en/news/2022/11/20221102-mm-gwv-finma/. ↩
3. FINMA, “Money laundering (2024)”, dossier on combating money laundering, https://www.finma.ch/en/documentation/dossier/dossier-geldwaeschereibekaempfung/geldwaescherei-2024/. ↩
4. FINMA, “FINMA Guidance 02/2019: Payments on the blockchain”, media release, 26 August 2019, https://www.finma.ch/en/news/2019/08/20190826-mm-kryptogwg/. ↩
5. Goldblum, “Travel Rule Switzerland: Art. 51a AMLO-FINMA”, https://goldblum.ch/knowledgebase/travel-rule-switzerland/. The article attributes the threshold to Article 51a AMLO-FINMA. ↩
6. Grant Thornton Switzerland, “Switzerland Adopts EU Sanctions Against Russia in the Crypto Sector”, 2026, https://www.grantthornton.ch/en/insights/switzerland-crypto-sanctions-russia/. See also Lenz & Staehelin, “Swiss sanctions against Russia – Further alignment with the EU – Implementation of the 19th Sanctions Package”, 2026, which refers to Articles 20 and 20a of the Ukraine Ordinance. ↩
7. Crypto Briefing, “Switzerland adopts most of EU’s 20th sanctions package against Russia, including crypto restrictions”, May 2026, https://cryptobriefing.com/switzerland-eu-russia-sanctions-crypto/. ↩

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.