Why Crypto Entrepreneurs Are Choosing Switzerland

For those in the crypto industry, regulatory clarity can be the difference between success or failure for a startup. Banking and banking restrictions, unclear licensing paths, and differing legal rules often hold up projects even before they reach the market. Even with a thoroughly prepared team, the team risks losing the confidence of investors and burning cash processing regulatory approvals.

To sidestep this complicated hurdle, more founders are looking to countries with predictable, business-friendly regulations. Countries like Switzerland, with its clear legal framework and supportive environment, helps crypto companies access banking, provide a way for dealing with regulatory compliance, and plan for future sustainable growth.

The Cost of Regulatory Instability

Cryptocurrency regulation is inconsistent in many countries, with companies receiving initial approval only to have that company re-regulated a few months later. Founders have had to wait anywhere from 3-6 months to even open a rudimentary business bank account.

These regulatory barriers also slow progress when timely momentum is especially critical to the company’s growth. Some of the most common reasons for this or the most common hurdles include:

-Delay accessing a basic banking service
-Conflicting or unclear licensing conditions
-Changes in a fiscal policy and alleged or presumed regulation
-Investor indecision or apprehension having to do with potential changes in the regulation or approach

When regulation is unpredictable all teams lose valuable time, valuable capital and valuable trust. In turn, this also slows the momentum for that organization at the time when the companies should be moving expeditiously.

Precise Classification and Legal Certainty

Crypto businesses will be treated by Swiss regulators based on their business activities. Custodians, exchanges, and token issuers are examples of groups subject to specified compliance obligations. These defined initiatives will allow companies to understand their weight of responsibilities as corporate citizens early enough to frame a budget and handle any upcoming complications they may face.

Rather than to muddle through what operational requirements will be, or with compliance obligations, founders will be presented with a clearer path and sense of compliance. This variance will allow some operational uncertainty to be removed, and make it easier, and more secure, to operate as a founder.

Proportional Oversight That Supports Growth

Switzerland also has proportional regulation. Large custody and exchanges face a higher degree of scrutiny and expectation level; smaller startups have a bit less of a burden. The oversight is primarily provided by FINMA (the national financial regulator) and licensed Self-Regulatory Organizations (SROs) that oversee specific types of business activities.

What this allows is for earlier-stage companies to keep their operations light while remaining compliant. At the same time, it provides some comfort to investors that there are appropriate checks in place.

Licensing as a Strategic Advantage

Image: Cryptocurrency and investment tracking | Fintech Harbor Consulting Ltd.

Obtaining your crypto license in Switzerland is not just a regulatory requirement, it is also a competitive edge that can give you access to banking, a strong credibility with institutional counterparties, and regulated capital. With a Switzerland based license, businesses are able to expand their reach with European markets, using the license as a reference.

Preparing for a license application can take time and effort. Companies usually need to set up internal compliance programs, model their business model, and get a regulatory review. Licensing can be tedious, but ultimately it mitigates reputational risks or operational defects that could arise without being compliant.

At Fintech Harbor Consulting, we build businesses around the license procurement process. We equate our guidance to the length of time and effort you want to take the potential licensing application process.

Partnering with Fintech Harbor Consulting

Fintech Harbor Consulting is supporting crypto entrepreneurs throughout their licensing journey. The firm offers:

-Customized assessments based on your business model
-Corporate setup and jurisdiction strategic remedies
-Document preparation for submission to FINMA or the relevant SRO
-Ongoing compliance support

By taking care of each step, the FinTech Harbor team is helping to eliminate delays and ensure your company will start in good legal standing.

A Stable Environment for Long-Term Success

Switzerland’s regulatory model is characterized by transparency and predictability. Any change in policy goes through a public consultation with timeline details, allowing companies to plan for the long-term without any disappearance risk of their business.

In addition to the regulatory approach, the Crypto Valley located in Zug helps to facilitate growth by creating connectively between startups, the legal community, active investors, and professional service providers who have experience in dealing with digital assets. While compliance costs may be higher than a less regulated market, the benefit is more access to capital and better banking relationships over time.

Final Thoughts

For cryptocurrency entrepreneurs, banking delays, changing requirements, and ambiguous rules can help assure proper progress when speed is everything.

Switzerland creates a better environment since the consistency in the regulations allows the founder to plan, build and scale without having to guess the legal landscape. Fintech Harbor Consulting works closely with startups to get over the barriers that can slow progress toward launch. We facilitate everything from preparing regulators for license applications, to structuring a business so that we are planning to comply with our partner companies, allowing the company to avoid the start-stop dynamics of launching a business. This means our founder clients can move faster than usual, manage investor expectations, and focus on what matters - growth!