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CVA Statement on Swiss Banking Association Guidelines

By | Articles, CVA in the News

Swiss Bankers Association – with support from the Crypto Valley Association – has developed guidance for Swiss banks opening bank accounts for crypto & blockchain companies.

The Crypto Valley Association (CVA) welcomes the issuance of new guidance from the Swiss Bankers Association (SBA) to its members, regarding the treatment of blockchain-based companies in the country. The new guidance directed to member banks of the SBA is intended to provide increased clarity and assurance and remove barriers to the growth of the Swiss blockchain ecosystem.

The guide, an initiative of the SBA and developed with the input and assistance of the CVA Regulatory Working Group, makes key distinctions between blockchain-focused companies seeking to raise capital through an Initial Coin Offering (ICO) and those who do not. According to the outline, companies which do not fundraise through an ICO should be treated no differently than regular Small Medium Enterprises (SMEs). Further distinction regarding documentation needed is made between ICOs carried out with fiat currencies and those using cryptocurrencies. The guide has been welcomed by FDF, the Federal Department of Finance, and FINMA, the Swiss Financial Market Supervisory Authority.

Oliver Bussmann, President of the Crypto Valley Association, welcomed the announcement, saying “We have seen a lot of positive growth in the ecosystem over the past 18 months and now it was very important that the SBA, CVA and authorities could come together and successfully work on a solution that can ease some of the restrictions that could hamper the continuation of that growth.”

Dr Mattia Rattaggi, who chairs the CVA Regulatory Working Group, added, “This guide is an important and timely contribution. As a multi-stakeholder organization it was important for us at the CVA to bring a diverse range of perspectives and expertise to the table for the development of these guidance and we hope that it will benefit the healthy advancement of the crypto/blockchain industry in Switzerland.”

Switzerland has gained a world-wide reputation as a popular destination for crypto and blockchain companies. In 2017, four of the ten largest ICOs were conducted in Switzerland. In 2018 the country continues to rank among the most attractive places for blockchain companies.

Read the SBA announcement here.

Crypto meets VAT in Switzerland

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Work on the draft VAT guidance on cryptocurrencies by the Swiss Federal Tax Administration (SFTA) has concluded after intense and diverse discussions in the VAT and crypto community. The CVA Working Group Tax / Accounting / Structuring (CVA WG TAS) has gladly taken the opportunity to be involved in this discussion and to promots the active exchange between the CVA WG TAS, authorities, CVA members and crypto community as well as a sustainable opinion formation. Although still working on reaching a state of consensus within various topic leaders, individual members of the CVA TAS have already responded or are currently finalizing their statements to the SFTA.
In light of the general importance of this topic for the entire crypto community and to showcase the progress achieved by the members of the CVA WG TAS in the last couple of weeks, the CVA WG TAS will be hosting a dedicated meetup “Crypto meets VAT Switzerland” on Tuesday, 25 September 2018, 11 AM at MME Zurich (Zollstrasse 62, 5th floor).
Please find further information here.

Where to go and who to know in Crypto Valley, Zug

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The past few years have seen Zug become more and more well-known not only for the multi-national companies that resort to the medium-sized Swiss canton for tax relief, but also for its vibrant crypto scene.

What started as a place to safely and securely conduct an ICO (in the style of Ethereum and others) has blossomed in to veritable mecca for crypto explorers and others who are anxious to make connections with the international community gathering in Zug.

Now there is a (short) guide to help curious blockchain entrepreneurs get a taste of where to go and who to know in “the Valley.”

Read the full Crypto Head’s (Short) Guide to Zug.

Personal Views: Interview with Luis Cuende

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This is the first in a series of “Personal Views” – short interviews with people of interest in Crypto Valley, sharing their views, experiences and perspectives on living and working in this unique ecosystem.

Ian Simpson (CVA): How did your team come together to work on Aragon?

Luis Cuende: Aragon One, the first team working on the Aragon project, has expanded from just 2 people (Jorge and me) to 13 now, but we have always been very careful about the team members we invite to our family. Some of them were community members, some of them were in the crypto space before, and some of them are even new to the space!

As a really early stage project, what were the things you needed, the “holes” where you said “Hey – we need someone to help us on this?”

Well, most of Ethereum infrastucture is very early, so we felt that way a lot of times. However, we had to build a lot of that ourselves, hoping that other projects can use all that infrastructure instead of creating from scratch.

Why did you decide to move to Crypto Valley?

It was a mix of reasons and there’s more info at https://blog.aragon.one/aragon-zug-f4d7aaff15e1, but basically right now Aragon needs a jurisdiction where the regulators and the government makes things easy. Zug has been so welcoming and the people here understand that crypto can help Switzerland keep progressing as a society based on privacy and freedom.

Aragon is about decentralized organisations. What are the qualities that make a decentralized organization strong? Why does the world need them?

One of them is the decentralization of power. Centralized power corrupts, as shown by history a lot of times. Decentralizing it out opens the door to running fairer societies all across the world. It also has benefits in the individual scale, for example allowing individuals in oppressive governments or institutions to speak up and organize themselves without being in a disadvantage with other individuals. With Aragon, a kid in Venezuela has the same tools to create value than a Stanford graduate.

You aren’t Swiss, but being here and hearing as people talk about “Crypto Nation” Switzerland – do you think this is what is needed? Or should countries and nations stay out of trying to be “the” country?

Well, I don’t think they can stay away from it. Crypto is a tool that will completely reshape society. As a part of reshaping society, they will also reshape government, commoditize it and flip the relationship with their citizens. Switzerland, and especially Zug, is very well positioned to be the crypto jurisdiction. This will obviously create jurisdictional competition with other places, but that can only lead to a race to create better governments that work for the people, and not the other way around.

Do you think blockchain technology by itself is capable of enabling fulling decentralized organizations…or does it have to be combined other systems, some centralized etc to work best?

Fully decentralized works best! Decentralization needs openness, free software, community governance… having one of those without the other doesn’t make much sense.

You made the statement at the Crypto Valley Conference that since you were born in ’95 you had no way of comparing the growth of blockchain to the internet boom – do you think this “ignorance” or lack of experience is a good thing? Does it make you free to experiment more?

I think so. We have to find a right balance between freshness and experience, but I definitely think that not having a lot of bias of how things used to be done is very positive for this revolution. Most of the times you cannot draw parallels because it’s too different.

Where will blockchain be in 5 years?


Blockchain is… (10 words or less)

An immutable shared source of truth powered by game theory

Heated exchange – the ongoing centralisation vs decentralisation issue

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The past week saw more action here in Crypto Valley – more so than usual.

For the third time in less than six months, Zug played host to a major blockchain event. After the successful Crypto Valley Conference in June and the equally well-attended Blockchain Summit in April, the Theatre Casino welcomed Tech Crunch and wide array of well-known names in the blockchain and crypto world.

Those names included Binance founder Changing Zhao, Consensys founder Joe Lubin, Galia Benartzi of Bancor and Crypto Valley’s own Mona El Isa of Melonport.

And then there was Vitalik Buterin – along with a strong contingent of the Ethereum Foundation, one of the main catalysts behind the birth and growth of the Crypto Valley ecosystem to begin with.

Burn in hell

It was, of course, Vitalik who provided the highlight quote of the event by declaring, “I definitely personally hope centralised exchanges go burn in hell as much as possible.” – a comment that figured into a wider discussion about the values and challenges of running a decentralised organisation.

While the quote itself would have been a headline-grabber in and of itself, it echoed even louder coming on the same day that SIX Group, the owner and operator of Switzerland’s stock exchange announced its plans to build the SIX Digital Exchange (SDX) – a DLT-based end-to-end infrastructure for the issuance, trading and storage of digital assets, including tokenised securities.

Numerous commentators, many on Twitter, did not miss the irony of the two events happening simultaneously – nor did they miss the chance to deride the move by SIX as purely marketing.

Not so serious

However, the second day of the Tech Crunch gathering, which featured an Ethereum meetup hosted by the Ethereum Foundation, provided additional perspective on the centralised vs decentralised exchanges discussion.

In a panel discussion that included Coinbase CTO Balaji Srinivasan and Vitalik, the question was raised “How can centralised and decentralised exchanges work together?” In response, Vitalik admitted that the bridge from fiat to crypto remains a strong area in which centralised exchanges such as Coinbase have a role to play.

A complex future

Although the subject of centralised digital asset exchanges for tokenised securities did not come up, the point can be made that a future which includes tokenised securities and all manner of financial instruments bound to the blockchain will not happen overnight.

It is reasonable, therefore, to see projects such as the SDX as inherently important to the transition to a tokenised future, given that the weight of market incumbents will be necessary to maintain an even keel and encourage adoption.

Will decentralised exchanges ultimately snuff out their centralised counterparts? It is too early to say – and the future may very well end up being a patchwork mixture of both.

Popular sentiment will be strong to support Vitalik’s wish – and to push out those who exploit centralisation for obscene gains.

And it may just be enough to take us all to a decentralised heaven.