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Update – CVA Statement on Blue Trading

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We have been following up on to the news of Blue Trading allegedly being a fraudulent Mauritius based organization since it was first brought to our attention a few weeks ago. We have blocked them from any existing or potential CVA membership and have taken appropriate measures to guide affected individuals to the correct authorities. Our newly elected Ethics Officer and his team are currently investigating the case and will provide, if applicable, any details to the appropriate authorities.

We are deeply disappointed with the actions of individual companies which undermine not only the brand of the CVA, but the adoption of blockchain and digital assets as a whole.  Be assured that the matter has our full attention and are aiming to provide the assistance we can to ensure the matter is resolved.

Our actions behind the scene are not reflected at the moment on the CVA website because we are legally restricted to share any information publicly on a case still being investigated. As soon as possible we will publish any updates to the extent that is legally permissible.

While honoring our commitment to full transparency the CVA is handling this matter with respect to the principles of fairness, proportionality and the presumption of innocence.

CVA Working Group Tax / Accounting / Structuring participates in the review process of the Swiss draft VAT guidance on cryptocurrencies

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The CVA Working Group Tax / Accounting / Structuring (CVA WG TAS) has successfully submitted on behalf of the CVA board last Friday, 15 March 2019, its statement regarding the revised first draft VAT guidance on cryptocurrencies issued on 29 January 2019 by the Swiss Federal Tax Administration (SFTA).

The statement has been prepared by Markus Vogel (Chair CVA WG TAS & Tax Partner KPMG), Monika Molnar (Member CVA WG TAS & Tax Partner MME) and Thomas Linder (Member CVA WG TAS & Tax Partner MME) and submitted with the approval of the CVA board to the SFTA. This action is another example of CVA’s diligent work on improving the state of blockchain resp. the business environment in Switzerland and also accounts for the CVA community’s demand to address the current uncertainties in respect of Swiss VAT duties for blockchain businesses.

Although the authors recognise that the revision of the first draft has been a move into the right direction, several aspects of the draft VAT guidance should be reassessed. An outline of the most material revision claims by the CVA WG TAS can be found below:

  • Missing reflection on the cybernetic and autonomous aspects of a decentralised, public open-source blockchain system
  • Necessity for a functional approach towards the classification of blockchain tokens under the consideration of the synchronisation with the respective legal effects:
    • Native tokens
    • Counterparty tokens
    • Ownership tokens
  • Differentiation between crowdfunding activities such as ICOs and other transactions involving blockchain tokens (transfer of blockchain tokens) for VAT purposes
  • VAT treatment of ICOs should follow a case-by-case assessment and cannot be generalised
  • Issuance of blockchain tokens should only result in a VAT liability in case there is a supply of services or goods in return for the provision of (crypto)currencies
  • VAT treatment should basically follow the principles applied to the treatment of the referenced non-tokenised transaction(s) (e.g. voucher token should be dealt as a voucher from a VAT perspective)

You can read the entire statement from the Working Group here [in German].

The CVA WG TAS is keen on hearing back from the SFTA and looks forward to the further finalisation of the VAT guidance on cryptocurrencies. Once sufficient clarity has been reached, the CVA WG TAS will gladly organize respective community events.

New Strategic Agenda for Crypto Valley Association

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The Crypto Valley Association announced its strategic objectives and action plan at its Extraordinary General Assembly yesterday. The CVA Board, whose five new members were elected in January, underlined the need to facilitate blockchain and fintech startups in their funding and implementation goals while maintaining a focus on supporting the overall development of the technology. The Association supports the launch of an independent crypto-friendly Self-Regulatory Organisation (SRO) with a own-developed project plan and cooperates with the Swiss Bankers Association (SBA) in their effort to issue updated Guidelines on opening corporate accounts for blockchain companies. These and other projects will further help the ever-growing number of startups in Switzerland’s Crypto Valley while following on the trend towards a maturing ICO/STO market as revealed in a recent report co-published with PwC/Strategy&.

With more than 1’200 members from over 20 countries, the Crypto Valley Association continues to grow and expand as the global blockchain ecosystem continues to mature. At its Extraordinary General Assembly today, the CVA announced its strategic objectives and action plan to support its members while contributing to the healthy development of the businesses and the technology.

The recent report on Initial Coin Offerings (ICO) and Security Token Offerings (STO) published jointly by the Crypto Valley Association along with PwC Switzerland and Strategy& indicates a continued trend away from utility token offerings with a stronger emphasis on the more-regulated security token space. At the same time, there is a growing emphasis on the non-financial applications of blockchain technology.

In view of these trends, the CVA’s initiatives include the support of the implementation of an independent crypto-friendly Self-Regulatory Organisation, for which the Association has created a project plan, and the collaboration with the Swiss Bankers Association (SBA) in their effort to produce updated Guidelines on opening corporate accounts for blockchain companies.

The CVA is also committed to internationalise its member base as well as the greater Swiss ecosystem, while cooperating strategically with a wide range of stakeholders. It is also committed to developing a “members’ market-place” in order to help increase the flow of capital into the growing industry.

Finally, the Association will continue to cooperate formally with the Lucerne University of Applied Sciences in the organisation of the blockchain technology-focused Crypto Valley Conference and aims to strengthen the industry and advance the technology through development of best practices and promotion of thought leadership.

4th ICO and STO Report – growing less, but growing up

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Download the ICO/STO report here.


In the second half of 2018, the number and volume of ICOs and STOs decreased considerably, both due to the shift from ICO to STO and due to the so-called crypto-winter. Experts consider this a generally positive development. With the emergence of regulated STOs, the fundraising method ICO is now leaving a gray area. Global jurisdictions and infrastructure are in line with the trend, with Switzerland still playing a pioneering role.

Zug, 8 March 2019 – In 2018, 1’132 Initial Coin Offerings (ICO) and Security Token Offerings (STOs) were successfully completed, twice as many as in 2017 (552 in total) – as shown in the fourth ICO / STO report by PwC Strategy & in collaboration with Crypto Valley Association (CVA). After crypto-crowdfunding continued its growth course in early 2018 and reached the total volume of the previous year in March 2018, the number and volume declined considerably in the second half of the year. Two startups, EOS and Telegram, have generated a combined 5.8 billion as so-called “unicorns”. Daniel Diemers, Head of Blockchain EMEA at PwC Strategy&: “The trend demonstrates that from an investment strategy perspective, ICOs or STOs remain attractive to investors for venture capital financing. However, there is a process of rethinking in favor of more security and transparency for investors.”

New token models are gaining momentum

The continued decline in value of digital currencies by the end of the year has led to a state of so-called “crypto-winter” in the global crypto community. However, the declining investment volumes were not only caused by the valuation of digital currencies. STOs are gaining popularity in the cryptocurrency industry. Although, STOs as token offerings for securities and rights in rem are not fundamentally different from ICOs, they are a more regulated version of it. STOs combine many features of ICO such as low entry barriers for investors as well as traditional VC/PE fundraising characteristics, e.g. regulations based on local security laws including KYC/AML.

In addition to securities, there is a trend towards tokenization of assets like commodities (gold, oil, etc.) and the tokenization of intangible goods (e.g., music rights). Daniel Diemers “ICOs have often been designed as highly speculative vehicles and have attracted the attention of regulators. Improved regulation through the tokenization and recognition as securities is another step towards maturity. It is interesting to see how the industry has changed in such a short time and what business models will result or which will prevail.”

The regulatory landscape and infrastructure must “level up”

FINMA has addressed the topic of tokenization early on and differentiates between payment, use and investment tokens. “Switzerland’s advanced regulatory model, along with its greater reliance on STOs on established securities laws, provide a good basis for further blockchain developments. We are glad to see that Switzerland continues to play a major role in a dynamic marketplace even as it moves towards more asset tokens and stablecoins, “explains Daniel Haudenschild, president of the Crypto Valley Association.

In addition to increased protection, market participants demand new services such as flexible custody solutions, market data services, reliable rating services and research. With the increasing expectations and the increased regulatory requirements of STOs, the existing infrastructure, for example for trade and custody, must also develop further. This opportunity has been recognized by established stock exchanges and financial institutions and is expanding its services in the crypto sector. For example, the Swiss stock exchange operator SIX announced in the summer of 2018 a platform for the issuance, trading, settlement and custody of digital assets. Another Swiss bank was authorized in January 2019 to become the first global crypto custodian bank.

CVA Statement on Blue Trading

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The CVA has been approached by various persons regarding the Blue Trading platform. We are currently looking into allegations expressed publicly against Blue Trading of inappropriate business conduct, based on the CVA’s General Code of Conduct: 

“Members do their business in a responsible and transparent way, and do not engage in practices which would be potentially or factually damaging to the image and interests of the CVA and the ecosystem. Members adhere at all times to the Codes and, beyond it, to the applicable laws and regulations.”

As always, the CVA remains committed to its mission of fostering a healthy blockchain ecosystem and does not tolerate any inappropriate behavior within its membership, particularly when it goes against the values that members sign up to when becoming part of the Association.

Crypto Valley Association Transitions into New Year

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Five new board members elected as organization continues to grow along with local ecosystem


The CVA is happy to announce the election of five new members of the board at its 2019 Annual General Assembly.

Daniel Haudenschild, Kevin Lally, Kamales Lardi, Mattia Rattaggi and Martin Berweger will take over from outgoing board members Oliver Bussmann, Vasily Suvorov, Rene Huesler and Nicolas Schobinger. The new board members will work to further the progress that has already been accomplished in building the Swiss and global blockchain ecosystem.

After a period of rapid growth that saw the organization attract over 1’600 members worldwide, the Crypto Valley Association will transition into a new phase highlighted by the election of a slate of new board members.

At the Annual General Assembly held yesterday (31 January) in Zug, the CVA membership elected Kevin Lally, Kamales Lardi, Mattia Rattaggi and Martin Berweger to its board of directors and Daniel Haudenschild as Board President. Board members Maria Gomez and Jenna Zenk resigned at the conclusion of the Annual General Assembly, held in Zug.

In his opening statement to the assembled Association membership, outgoing Board President Oliver Bussmann underscored the rapid growth of the Crypto Valley ecosystem and the CVA’s success writing in the Association’s Annual Report, “We have been very effective in establishing the Crypto Valley as one of the world’s leading blockchain ecosystem, building relationships and alliances with startups, governments, companies, universities, investors and blockchain enthusiasts alike.”

The Association achieved a number of significant milestones in 2018:

  • Introduction of the FINMA ICO Guideline with 3 regionals events with over 600 attendees
  • Successful launch of the Crypto Valley Conference as the first IEEE Blockchain Conference   
  • Guidelines for bank account opening for blockchain startups with the Swiss Bankers Association
  • Blockchain consultation with the State Secretariat for International Finance (SIF)
  •  Publication of the first Swiss ICO accounting guidelines for utility/asset tokens with EXPERTsuisse’s Accounting Standards and Swiss VAT draft guidance
  • Three new strategic partners with Lakestar, Consensys and BDO Switzerland
  • “Influencer of the Year” Award of the Swiss FinTech Awards

Incoming CVA President Daniel Haudenschild commented, “I have been extremely impressed with the contributions that the CVA has made to Switzerland becoming one of the premiere locations for blockchain and cryptographic innovation. There is still much to accomplish, but I am confident that the strong network which the CVA provides can be a powerful force for further development as we push forward.”

The CVA thanks its outgoing board members and all those who have been involved in the organization’s success and development over the first two years of its existence.

BlockImmo becomes first regulated real estate crowdsale platform

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BlockImmo is a CVA member based in Zug. This article originally appeared on CryptoCoin News.

Tokenized assets are here to stay. The current race is about who can get regulated products to the market first and then who can successfully gain user adoption. While several projects have purported to tokenize real estate assets, blockimmo is the first to do it within the bounds of existing regulations in two jurisdictions.

The blockimmo platform launched recently with two test properties, but they intend to have actual real estate listed in the beginning of 2019.

The way blockimmo works is a real estate seller lists the property on the platform, along with an issuance of tokens which will represent shares of the property. Investors are then able to invest however much they like and watch the crowdsale progress. Various terms and limits can be placed on the sale. Once the sale is complete, each person who invested receives representative tokens in their wallet, tokens which are associated with a real-world holding by an investment firm in Lichtenstein.

We’ve heard this before. Several projects are working on similar goals, with regulations and government approval being the primary stumbling blocks. One that comes to mind is LA Token. TrustToken aims to do similar things in the future, as well.

Not Available in the US

The question of enforceability arises when there can be literally dozens of owners of a single property and the tokens can be swapped between wallets at will. To deal with this, blockimmo is limiting its operations to places where it is sure it can be fully regulated: Switzerland and Lichtenstein. They intend to expand to other parts of Europe as properties are successfully listed and the platform grows.

The properties that are sold on the platform, in a legal sense, are held by a Lichenstein firm, each with its own sub-fund. This is how the properties are secured in an IRL sense.

Switzerland is a great place to start a project like blockimmo because of the organization of its existing land registry. Founder Bastiaan Don said of this:

The properties we tokenise are already designated with the precise E-GRID number directly in the blockchain. This is already a known quantity in Switzerland and they are already entered as such in their own, centralised land register. Synchronising the systems would be a first step towards a land register on the Blockchain.

The big news last week for blockimmo was that FINMA, the Swiss financial regulatory body, had approved both their business model and their security token offering. This means they’re totally free to pursue their goals, and don’t have to worry about later running into problems with regulators. Swiss laws still apply to properties that are listed and exist within Switzerland, and there are various restrictions on foreigners investing in Swiss real estate.

FINMA announced this week that blockchain companies would be able to successfully operate in Switzerland with only minimal changes to its regulations.

The project has brought in a legal firm called MME to help it with legal issues that may arise, and also has the backing of family-run bank, Bank Frick, whose Director of Funds & Products, Raphael Haldner, said of the project:

The implementation of projects like blockimmo demonstrates the expertise of Bank Frick in the field of digital business models and products, as well our innovative drive.

Two example properties are live at blockimmo.ch so the public can see how the platform is intended to work. Real listings are expected to be happening as early as next month.

CVA Statement on Swiss Blockchain/DLT Regulatory Report

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Friday, 14 December 2018 – The Swiss Federal Council today released a report detailing Switzerland’s regulatory framework regarding cryptocurrencies and blockchain technology. The report was prepared in consultation with internal and external stakeholders — including the Crypto Valley Association (CVA) which provided input through its Policy and Regulatory Working Group, chaired by Dr Mattia Rattaggi.

The report indicates that the Swiss government will not seek to draft and implement new legislation for crypto and blockchain issues, but rather will seek to apply existing laws.

Dr Rattaggi expressed satisfaction with the contents of the report stating,

The CVA welcomes the release of the Federal Council’s report, and is entirely in tune with its goal to create the best possible framework conditions  for “Crypto Nation Switzerland,” while underlining the country’s integrity and reputation as a financial centre and business location.

It is positive that this is to be achieved through targeted adjustments to the existing legal framework – instead of issuing completely new laws.

We feel that this approach best represents the principle of technological neutrality and is in line with the position taken by the CVA in the consultation process. Crucially, this approach ensures maximum consistency within the current legal framework while keeping it principle-based and flexible, while allowing changes to be adopted on a ‘need-to-regulate’ basis.

To a large extent, the report also confirms what we, in the Crypto Valley community, have known for some time — that Switzerland’s regulatory system is already open and relatively flexible These are attributes that have been fundamental in the Crypto Valley’s emergence as a global hub of blockchain innovation.

The CVA Policy and Regulatory Working Group will work to analyse the details of the report, communicate its contents and implications to the CVA Membership and to continue cooperate with government stakeholders to build the wider Crypto Valley ecosystem.


If you’re interested in more regulatory information, you can read some of the papers published by the Policy and Regulatory Working Group here.

EXPERTsuisse issues first Swiss ICO accounting guidelines for utility tokens

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By Markus Vogel – Chair, Crypto Valley Association Working Group Tax / Accounting / Structuring & Tax Partner at KPMG Switzerland

With the release of the Q&A on special accounting topics (Accounting of ICO’s with Utility Tokens) by EXPERTsuisse the very first Swiss accounting guidelines for the issuance of utility tokens have been established. This constitutes a remarkable milestone achievement in the midst of the so called “Crypto Winter”.

EXPERTsuisse, the Swiss Expert Association for audit, tax and fiduciary practitioners, has mandated its Accounting Standards Committee to establish the very first Swiss ICO accounting guidelines for utility tokens in close collaboration with the CVA Working Group Tax / Accounting / Structuring.

The result of this fruitful collaboration is the Q&A referred to above.

In parallel, KPMG Switzerland, Strategic Partner of the CVA, has also edited an article (in German) in EXPERT FOCUS covering the publication of the Q&A.

It can be accessed here.

What’s the relevance of the Q&A?

The new ICO accounting guidelines for utility tokens revise the currently widely applied and tax driven practice of the „provision model“. Under the provision model any kind of proceeds originated in token sales / ICO activities are recognized as taxable income resp. revenue. However, this taxable income is offset by a provision in the same amount. In turn, corporate income taxation of ICO proceeds is deferred until the ICO project completion.

After having reviewed the current practice from a Swiss accounting perspective, it has been found that there are several inconsistencies with general accounting principles which need to be addressed.

What are the new guidelines?

The new ICO accounting guidelines are illustrated in the Q&A at hand of a simplified, but still representative case study named “Open.” Open engages in the development of an open-source blockchain protocol. In case of a successful delivery of the protocol, the ICO participants shall be entitled to partake in the allocation of the genesis block.

The new ICO accounting guidelines for utility tokens closely follow the accounting principles for long-term manufacturing orders under Swiss GAAP FER 22/3 and are also in line with the Swiss Code of Obligations. Although there is usually no legally enforceable contractual relationship, the public announcement of the development of the platform within the whitepaper is sufficient to assume a factual obligation. Hence, the respective ICO company has the implicit order from the token purchasers to put sincere efforts into the development of the respective decentralized platform. These efforts are considered to be financed at hand of so called advance payments without repayment obligations.

Since it is assumed that the prerequisites for the application of the usual “percentage-of-completion-method” are likely not fulfilled, any proceeds from an ICO project needs to be recognized as revenue in the amount of expenses directly attributable to the ICO project in a given fiscal year without disclosing any profit element.

Having said that, any expenses directly attributable to the ICO project can be deducted from the received advance payments (without repayment obligations) which are considered as liabilities in the balance sheet.

As a consequence, any “excess advance payment amount” at the end of the development phase of the decentralized protocol shall be recognized as revenue respectively profit. In case, it becomes evident that the raised financing is not sufficient to cover all development expenses for the ICO project, a so-called contingency provision needs to be booked. Reflecting on the outcome under the new ICO accounting guidelines, the profit recognition for accounting and tax purposes still corresponds to the timing under the provision model.

Besides the above-mentioned changes, the new ICO accounting guidelines for utility tokens have also specified the accounting treatment of own token reserves (from genesis mining). They stipulate that any own token reserves need to be priced at historic production costs in the financial statement of the respective ICO company since a market price valuation appears to be inappropriate.

Final remarks

As outlined in the beginning, today’s publication of the Swiss ICO accounting guidelines for utility tokens is an outstanding achievement and emphasizes the uniqueness of the ecosystem Crypto Valley and all Switzerland can offer to anyone working on the break-through of this great emerging technology.

The Accounting Standards Committee and the CVA Working Group Tax / Accounting / Structuring continue their productive collaboration and have already started working on the respective accounting guidelines for asset tokens.


Zug citizens open to more blockchain-based e-voting

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Nearly eight in ten of respondents in Zug welcome e-voting secured by blockchain technology 

Zug, SWITZERLAND — November 30, 2018 — Most residents of Zug, Switzerland, approve of e-voting secured by blockchain technology as it makes voting quicker and easier than traditional ballots, according to those who participated in the country’s first ever blockchain-based e-vote last summer.

The City of Zug, Hochschule Luzern’s Blockchain Lab, and Luxoft, today jointly release a report evaluating the results of the e-vote in Zug. The report highlights the benefits of decentralized voting, outlines the underlying architecture of the blockchain-based system and analyses the experience of residents who participated in the vote.

More than 220 people in Zug have a registered digital ID and were eligible to vote on the platform, and nearly 100 responded to the survey carried out by the City, following the blockchain-based municipal vote on June 25 and July 1.[1]

The findings reveal that most residents welcome the prospect of more blockchain-based e-votes; 79% welcome the use of e-voting in the city, with just 2% opposed to it. Moreover, 52% agree that e-voting should be introduced to make voting easier and quicker than filling out a ballot. Despite the high level of approval amongst residents, some remain skeptical about the security of e-voting.  While 21% believe blockchain technology makes electronic voting more secure, 16% have security concerns.

The voters praised each element of the voting solution built by Luxoft, from verification to the use of private keys.  Many voters noted that not enough had been done to raise awareness of the voting trial to boost participation. This is reflected in the fact that of the residents that took part, 75% already owned a digital ID and only 25% needed to acquire a digital ID to vote. Residents therefore accept that the option to vote by mail in addition to e-voting is still needed today until further progress is made.

Zug’s city president, Dolfi Müller, welcomed the feedback and commented, “It is nice to see that, despite some minor difficulties, many people in Zug are happy to live in such an innovative community and look forward to further research and development in the field of digital ID and blockchain technology.”

“It’s clear from this report that voters in Switzerland today recognize the value in using a blockchain-based e-voting system,” said Vasily Suvorov, Luxoft’s Chief Technology Officer. “While the technology that underlies this system is extremely complex, residents agreed that the platform was simple and practical to use. This is a platform that makes it easy for people to interact with blockchain on an everyday basis.”

Dr. Alex Denzler, head of Hochschule Luzern’s Blockchain Lab concluded, “There is still more progress to be made before we see such systems implemented globally. All the partners integral to expand the blockchain-based e-voting system continue to collaborate so it can become an established, reliable solution for voters everywhere.”


[1] There are 220 residents in Zug with digital identities. 72 took part in the vote between June 25 and July 1, and 95 responded to the city’s survey after the vote to provide feedback on e-voting secured by blockchain technology and the voting process.