Swiss financial regulator: a risk Factor for the cryptocurrency investment is 800%

Management to oversee the operations of the financial market Switzerland (FINMA) informally signaled that the risk ratio for cryptocurrency investments should amount to 800%. The Agency announced this figure in a letter dated 15 October in response to the Association request EXPERTsuisse, consisting of experts in the field of tax and audit activities.

In his letter to FINMA also said that the relevant legal provisions are not yet valid, therefore, banks and other stakeholders are often required to clarify this issue.

“FINMA recently received many inquiries from banks and securities dealers, which owns positions in cryptocurrency assets, and subject to requirements on capital adequacy, risk allocation and legal regulations on the calculation of ratios short-term liquidity” —quoted by Swissinfo representatives of FINMA.

In Switzerland, for several years there has been a formal integration of cryptocurrency products and banking sector, this European country is trying to create a legal environment that can support the development and operation of new financial instruments. At the same time, until the international Basel Committee on banking supervision develops all acts and laws necessary to regulate this area, FINMA can only give approximate figures.

However, the final decision may be announced at the end of November, when is the next meeting of the Basel Committee. Therefore:

“All scriptactive must assign an overall risk ratio of 800% to cover market and credit risks, regardless of where hold positions in the banking or trading assets,” — said in a letter to FINMA.

According to several sources, comment on the situation, 800% is a big figure, but it is within the allowable range. For example, the startup SEBA, which in September drew 103 million dollars to create cryptocurrency Bank of Switzerland, said:

“This recommendation will have limited impact on its business model. Nice to see that the banks no longer look away from the increased number of clients requiring services associated with cryptocurrencies, and ask for advice and do your own contribution,” said a spokesman for lobby group Bitcoin Association Switzerland.

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The financial regulator of Hong Kong called ICO “blatant fraud”

The Commission on securities and futures of Hong Kong (SFC) has publicly expressed their skepticism about primary offerings of coins (ICO).

Speaking at the event dedicated to the investment industry Julia Leung, Deputy head of the Commission on securities and futures in Hong Kong, has again warned the public about the risks associated with the ICO:

“Although we recognize that innovative technologies such as the Blockchain, have the potential to improve the efficiency of the financial sector, it does not give anyone the right to hold public fundraising, violating the legislation on securities”.

Julia Leung also expressed concern that, despite the loud statements, many of ICO projects in fact may not offer the promised technological innovation, which means big risks for investors:

“Many ICO questionable, if any, are outright fraud. Issuers manage to escape from the scrutiny of the police or securities regulators due to the transboundary nature of their projects, as well as the nature of cryptocurrency”.

Also the head of the SFC commented on the recent closure of one of the local ICO-projects, in which, in the opinion of the regulator, offered in Hong Kong of unregistered securities. Earlier, SFC ordered several cryptocurrency exchanges to delist tokens obtained during the ICO, on the basis of their consideration by the Agency as securities.

In the framework of its activities, the SFC seeks to educate the public about the alleged risk of investing in cryptocurrencies. In January, the Commission on securities and futures of Hong Kong launched a campaign in the media using the underground network of the city, with the aim to ease the growing public interest in investments through ICO.

In his speech Leung explained the popularity of such investments. Based on her statements ICO appealing through the spirit of adventurism among the users:

“Most of those who invest in the ICO understand that tokens have no value, but rely on their fast growth on the secondary market.”

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