Three years ago, Xapo set out to determine the optimal jurisdiction from which to serve non-U.S. customers. Our research ultimately identified Switzerland as the ideal jurisdiction, as explained in a May 2015 blog post.
We are happy to announce that, after almost two years of substantial effort and investment, Xapo has received conditional approval from the Swiss Financial Market Supervisory Authority (FINMA) to operate in Switzerland. This approval is contingent on several factors, including membership in a Self-Regulatory Organization (“SRO”) but we are optimistic that we will meet the required conditions and be able to serve non-U.S. customers from our headquarters in Switzerland.
We wish to commend FINMA on their professionalism throughout the approval process. Since the beginning, FINMA personnel have acted in a proactive, collaborative and transparent manner; while Xapo did not always receive the answers it wanted, we always received answers grounded in reason, law and fealty to the principle of consumer protection.
In addition, when obstacles arose, FINMA invariably suggested solutions. We immediately accepted their suggestions when we could and, in other cases, modified or developed products to meet regulatory requirements.
It was this product development, not bureaucratic indifference, that added weeks and months to the application process; moreover, the tools that Xapo was required to develop will ultimately benefit our users by ensuring effective oversight of our company.
Like Xapo, FINMA invested a tremendous amount of time and resources in the approval process. Their personnel spent countless hours learning a new, complex technology, then researching its proper treatment under existing (sometimes ill-fitting) legal paradigms.
Many regulatory bodies in similar situations would have rejected Xapo (and Bitcoin) entirely. By choosing to persevere, however, we believe FINMA has positioned Switzerland as a hub for fintech innovation and ensured Switzerland’s primacy in global financial services for decades to come.
We thank FINMA and commend them for successfully balancing strict adherence to consumer protection with a commitment to innovation.
[Note: Xapo also owes a large debt of gratitude to many individuals within the Swiss business community, a debt we intend to address in a later post.]