“The application process has shown the need for further reviews of the anti-money laundering framework and potential enhancements. Bitcoin Suisse has initiated the respective projects which, however, need more time than anticipated,” the company said in a statement on Wednesday.
The Swiss Financial Market Supervisory Authority (FINMA) said there were “various” reasons for telling told Bitcoin Suisse that its license application is currently “ineligible for approval and that the prognosis is unfavourable. Among other things there are indications of weaknesses in the money laundering defence mechanisms.”
The setback is a blow to Bitcoin Suisse’s growth ambitions, particularly in the nascent market for digital securities. FINMA granted banking licenses to two rivals, Sygnum and SEBA in 2019, the same year that Bitcoin Suisse submitted its own (now failed) application.
The company said it might re-apply for a banking license in future, but for the moment will concentrate on its brokerage, storage and other cryptocurrency services. Plans for a further banking license in Liechtenstein, which would grant access to the European Union market, have also been put on hold.
Last year, investors poured CHF45 million ($48.5 million) into Bitcoin Suisse. CEO Arthur Vayloyan insisted that shareholders still have reason to be optimistic. The company benefitted from the huge rise in value of bitcoin and other cryptocurrencies over the last few months.
“We were supremely well-positioned to take advantage when the market took a march to the north last year,” he told swissinfo.ch. “We could really profit from this event even without a banking license.”
The company, which formed in 2013, said it expects in June to announce revenues of CHF45 million last year and a CHF15 million profit – significantly higher than in 2019. In 2020 it also added 120 staff to its roster now totaling more than 200 in Switzerland and Denmark.