FINMA wants to lower the limits even further

At Pocket, we help thousands of people safely access bitcoin every day by making the buying process as simple and secure as possible. With a simple bank payment, it is possible to buy bitcoin and receive them directly into your wallet.

To make this secure entry into bitcoin as easy as possible, we at Pocket perform simplified identifications based on bank payments. This allows our users to focus completely on bitcoin and not have to get fully identified right away when making their first purchases.

This easy entry into bitcoin is now at risk. The Swiss Financial Market Supervisory Authority (FINMA) wants to once again lower the amounts that can be exchanged into bitcoin using the simplified identification process.

Renewed restriction of bitcoin

In 2021 FINMA created an exemption for cryptocurrencies. The usual applicable threshold for money exchange transactions without full identification was lowered from CHF 5000 to CHF 1000 per day. Even then, FINMA's reasoning was highly controversial.

As of 2023, FINMA again wants to specifically restrict transactions with cryptocurrencies. The new "clarification" defines that the limit of CHF 1000 will no longer be applied per day, but per month. Once again, an exemption is introduced only for cryptocurrencies, while all other money exchange transactions are not affected.

Disproportionality

As a reason for this renewed breach of its technology neutrality, FINMA repeatedly points to the same tabloid article that reported cases of abuse at specific Bitcoin vending machines. It ignores the fact that these machines have since been adapted. It also does not publish its own data and figures on such cases. It appears that FINMA makes its rules based on perceptions rather than evidence.

The fact that such a reinterpretation of the thresholds also harms services like Pocket is simply accepted. The fact that the risks of abuse are much higher when transacting with cash at a Bitcoin ATM than when transacting through a bank payment, as is the case with Pocket, is not taken into account.

We consider the proposed change highly discriminatory and disproportionate.

Discriminatory, because once again a categorical disadvantage is created for transactions with cryptocurrencies. The different risk profiles of different service providers are overlooked.

Disproportionate, because this change will steeply raise the entry threshold for all legitimate users based on a few questionable arguments. It will especially affect new users who depend on a low entry threshold. We need to encourage new users to store their bitcoin in their own wallet through simple and secure processes, rather than driving them to providers that do not promote this secure storage method in the same way, or even make it impossible to self-custody.

With these arguments in mind, we are submitting our comments to FINMA rejecting the announced proposal and requesting that the proposed regulation amendment be removed.

Tell FINMA what you think

In order for our criticism to be heard by FINMA, we need your support. Therefore, we also ask you to submit a statement on your behalf. To make this easier for you, we have created a letter template.

It's very simple:

1. download Letter Template (.docx, 8.56 KB)
2. adjust name and date
3. optional: add your own critical opinion
4. send letter as Word and PDF to FINMA by email

You have until May 10, 2022 to submit your comments: The more critical comments submitted, the more seriously FINMA will have to take us.

Thank you for your support!