Swiss Regulator: Cryptoasset Risk Coverage to Be Estimated At 800% Of Market Value

  • Switzerland's financial regulator, FINMA, has instructed local financial institutions to estimate risk coverage for cryptoassets at 800% of their market value.
  • FINMA considers cryptoassets to be a highly volatile and risky asset class.

Switzerland’s financial regulator, the Financial Market Supervisory Authority (FINMA), has  reportedly recommended that cryptoassets should be “assigned a flat risk weight of 800% to cover market and credit risks.”

FINMA also advised local banks and other financial institutions to estimate risk coverage for all digital assets at 800% - “regardless of whether the positions are held in the banking or trading book.”

The high risk coverage for cryptoassets indicates that FINMA considers them to be highly volatile, and classifies their trading “at the same level as hedge fund activity.”

"Increasing Number Of Enquiries" From Cryptoasset Holders

Although the Swiss financial regulator acknowledges that cryptocurrency prices have stabilized in the last few months - with bitcoin’s (BTC) volatility index being at its lowest since December 2016, it still thinks that the “spectre of volatility stills hangs over the asset class.”

According to a confidential letter FINMA recently sent to EXPERTSuisse (an association for Switzerland’s accountants and trustees), the Swiss regulator has “received an increasing number of enquiries from banks and securities dealers holding positions in cryptoassets.”

In response, FINMA said that anyone who owns cryptoassets is “subject to capital adequacy requirements, risk distribution regulations and regulations for the calculation of short-term liquidity ratios.”

Must "Assume Value Of $50,000" Per Bitcoin

Bitcoin (BTC) is currently trading at around $6,400 according to data from CryptoCompare, however, a financial institution has to “assume a value of around $50,000” per bitcoin when determining the “risk-weighted” value of the cryptocurrency.

Because of this, banks and other financial service organizations must “put aside a larger chunk of capital to cover potential losses of cryptocurrency positions than most other assets,” local news outlet, SwissInfo.ch explained.

FINMA has also instructed Swiss financial institutions to limit their digital currency trading activity to 4% of their total capital. When this limit has been reached, the institutions must report to the nation’s regulatory authorities.

Positive Feedback From Switzerland Bitcoin Association

Notably, these guidelines are only applicable to cryptoassets that institutions are holding on their balance sheets, and do not apply to customer funds held separately.

Responding to the new crypto regulatory requirements, the Bitcoin Switzerland Association (an “active community” of crypto enthusiasts that aim to increase awareness of digital assets), said: 

It’s encouraging to see banks no longer turning down the increasing number of client requests for crypto services but asking for guidance and providing their input along the way. This is the Swiss financial centre’s first step towards moving into the next decade where assets are no longer held in a single, central custody but instead are held on the blockchain.

Bitcoin Switzerland Association

 

BSV Surges 80% As Craig Wright Files Copyright Registration for Bitcoin Whitepaper

Craig Steven Wright (“CSW”), the Australian computer scientist and self-proclaimed inventor of the Bitcoin protocol, has claimed that the US Copyright Office recently awarded him a copyright registration for being the original author of the Bitcoin whitepaper.

According to CSW, he has also been granted a copyright registration for writing “most of the original code” used to implement the Bitcoin blockchain network.

Commenting on the matter, DecryptMedia revealed that a spokesperson had sent a press release to the news media outlet, stating:

 

This is the first government agency recognition of Craig Wright as Satoshi Nakamoto, the creator of Bitcoin.

 

Meanwhile, CoinGeek reported that the registrations (allegedly) “issued by the US Copyright Office recognize Wright as the author” of both the initial Bitcoin codebase and the cryptocurrency’s whitepaper, which was published after the code was released.

Wright Has Only Submitted A Claim, Has Not Received Any “Recognition”

As pointed out by DecryptMedia, Wright’s claim that he has been granted “government agency recognition” would appear questionable. It seems that Wright has only registered a claim with the Copyright Office, which any individual or organization can submit.

At this point, the only thing that can be confirmed is that Wright paid a $35 fee in order to file an application which requests that he should be granted US copyright registrations for the authorship of the Bitcoin whitepaper.

Registering A Copyright Only Requires “Filling Out A Form”

As explained by Jerry Brito, Director at Coin Center, registering a copyright only requires filling out a simple form. Moreover, the US Copyright Office does not conduct an investigation, in order to determine the validity of the claim, Brito noted. The Office is only responsible for “registering” all claims submitted.

The Coin Center Director also clarified that copyright registration does not, in any way, mean or imply “recognition of authorship.” In statements shared with DecryptMedia, Brito further explained:

 

[CSW’s copyrights claim and application are] simply recognition by the Copyright Office that someone is claiming authorship. Registering a copyright is a simple as filling out a form with your claim... It would be up to a court to decide if a copyright registration is based on fraud or not.

 

Bitcoin SV Surges Nearly 80%

Soon after CoinGeek reported that CSW had received copyright registrations for being the author of the Bitcoin whitepaper, the price of Bitcoin “Satoshi Vision” (BSV) surged by nearly 80% according to CryptoCompare data.

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