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Wallet providers & AML

AML laws and regulations and its duty of due diligence applies if the service provider maintains the private key.

Custodian wallet provider: AMLA applies (Supervision & AML)

  1. provides safekeeping and enables clients to send and receive crypto assets
  2. if order the transfer of cryptocurrencies for clients, a payments transaction service is provided
  • has access to clients’ private keys (custody), thus has power to dispose over third-party assets
  • includes providers whose signature is required to execute the transaction (multi-sig)
  • must affiliate with an SRO or be directly subject to FINMA supervision
  • triggers AMLA duty of due diligence (KYC)
  • Relaxation for issuers of payment instruments: payments < CHF 3,000 per customer/year (Art. 12(2)(d) AMLO-FINMA) in relation to the duty of diligence

Non-custodian wallet provider: AMLA does not apply

  • do not keep or have access to clients’ private keys – cannot view or access clients’ wallets
  • provide software but not involved in transfer of assets
  • clients transfer in peer-to-peer transaction without wallet providers’ involvement
  • not regarded as a financial intermediary because no power of disposal over third-party assets is given
  • not subject to AMLA and its duty of due diligence
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