UPDATE (28th July 10:59 BST): According to a press release, Bitcoin Suisse has now received approval from FINMA for its ATM network.
UPDATE (20th June 21:18 BST): Comments from Bitcoin Suisse about it seeking regulatory approval for its ATM have been added.
The Swiss financial regulator has given permission for bitcoin ATM operator SBEX to launch a network of machines in the country.
The news comes in the wake of a report indicating that the authority had shut down a different operator just two weeks ago.
Jumping through regulatory hoops
SBEX, which currently operates one ATM in Geneva, can now deploy further machines because it has been accepted as a member of a non-profit organisation that is regulated by FINMA, the Swiss Financial Market Supervisory Authority.
The non-profit is called ARIF, the Association Romande des Intermédiaires Financiers, and is considered a self-regulatory body (OAR) in Switzerland.
Now, with membership in hand, SBEX has successfully applied for a money transmitter licence, fulfilling the regulatory requirements to operate an ATM network.
CoinDesk has seen a copy of a letter from ARIF to the operator, dated 17th June, that sets out the regulator’s stance on bitcoin ATM operators.
According to the letter, operators must join an OAR, but do not require a banking licence. It also restated that bitcoin in Switzerland is treated as a means of payment, not a good or a service.
SBEX co-founder Mathieu Buffenoir said:
“We finally got clearance from ARIF, who were asking FINMA many questions about how they should deal with us. [The clarification from ARIF] is what we were expecting.”
Cancelled ATM launch
Two weeks ago, a competing ATM operator called Bitcoin Suisse AG cancelled the launch of an ATM in Zurich, claiming that FINMA had requested a delay while the regulator clarified “legal questions”. This prompted speculation that Swiss authorities were clamping down on bitcoin ATMs.
However, according to Buffenoir, who has operated a machine in Geneva since February, running a single bitcoin ATM poses no special regulatory difficulties and is not regulated by FINMA.
This does come with the proviso that the business must stay within certain limits, such as completing fewer than two million transactions a year, Buffenoir said, adding:
“I don’t really know why [Bitcoin Suisse AG] made so much noise [about its ATM]. Maybe they wanted to get themselves known or they want things to move quicker.”
Bitcoin Association Switzerland president Luzius Meisser said the clarified rules were in line with the bitcoin community’s expectations, calling it “the most reasonable” interpretation of Swiss law.
He explained the confusion over Bitcoin Suisse’s suspended launch:
“I think SBEX fulfilled all the regulatory requirements before Bitcoin Suisse did, so they got the approval first.”
Bitcoin Suisse chief executive Niklas Nikolasjen said his firm was working on obtaining the necessary regulatory approvals for their ATM. He said the media had overstated his firm’s cancelled ATM launch and that it had been consistently working to obtain regulatory approval.
“It is now clear to everyone in the industry that the regulatory authorities require certain steps to be undertaken by companies who professionally deal with digital finance. BTCS is naturally following these requests as well,” he said.
Expansion plans
Now that SBEX has cleared Swiss regulatory hurdles, Buffenoir says the company will carry out its plan to set up a web brokerage and install nine ATMs before the year is up.
Buffenoir said SBEX has already placed orders for the machines with the manufacturer, Canadian startup BitAccess.
Additionally, SBEX has joined a new consortium currently lobbying the Swiss government to create an OAR dedicated to cryptocurrencies and to obtain a clearer regulatory framework from FINMA. The consortium already counts Bitcoin Suisse and Ethereum Switzerland among its members, Buffenoir said.
Switzerland is being closely watched by the cryptocurrency community, as its executive body, the Federal Council, is due to release a comprehensive report on bitcoin’s impact on the country’s financial system later this year.
Swiss lawmakers also moved, in December, to obtain recognition for bitcoin as a foreign currency.
ATM image via DiploFoundation