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How the FTX Crash Shows Switzerland’s Resilience and Potential for Blockchain Companies

After reaching a peak market value in 2021, cryptocurrencies have spent the better part of 2022 in a tailspin generated by scandal and financial losses. The crash of the crypto exchange FTX has worsened the situation, but how much has it really affected the crypto and blockchain industry in Switzerland? 

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The cryptocurrency exchange FTX filed for bankruptcy in November 2022. Experts suggest that a combination of factors, such as high leveraged trading and market manipulation, have played a role in the collapse, followed by a large volume of withdrawals from investors. Many cryptocurrencies, including Bitcoin and Ethereum, experienced significant declines in value.  

Why Switzerland’s regulatory environment is key 

Switzerland is considered a leader in the blockchain industry, with a strong ecosystem of start-ups, companies and research institutions. The Swiss government has taken a proactive approach to fostering blockchain technology and established a favorable regulatory environment for blockchain businesses. So how has the FTX crash affected the Swiss blockchain industry?  

Alexander Brunner, a specialist for cryptocurrency and blockchain technology and president of Home of Blockchain.swiss, says the crash hasn’t left Switzerland unscathed. “It has become more difficult to raise money. Crypto companies have become more skeptical and are acting more cautiously.”  

The Swiss way increasingly proves its worth and is resistant to crises.

No bankruptcies thanks to proper measures 

However, no crypto company in Switzerland has yet gone bankrupt because of the FTX crash. “FINMA, the Swiss financial market regulator, doesn’t allow business practices like FTX,” Brunner says. “Switzerland focuses first and foremost on security. By issuing licenses, businesses holding them can be controlled and sanctioned, if necessary.” 

Home of the world’s first crypto banks 

Switzerland licensed the first two crypto banks in 2019 and amended its law to accommodate blockchain technology in 2021. “As a result, Switzerland has crypto banks, licensed brokers, custodians and investment funds. Switzerland’s approach has always been slow and steady, and deeply rooted in its decentralized political system with many checks-and-balances. This is a cornerstone of Switzerland’s economic success, and this moderation has paid off. The Swiss way increasingly proves its worth and is resistant to crises.”  

 

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