When someone asks me why Valken is based in Switzerland, the answer is simple: Switzerland has the most developed, most pragmatic, and most crypto-friendly legal framework in the world. The Swiss Financial Market Supervisory Authority (FINMA) was one of the first regulators to issue guidance on cryptocurrency, the Swiss DLT (Distributed Ledger Technology) framework provides legal certainty for crypto assets, and Swiss courts have consistently demonstrated an understanding of how cryptocurrency works. For a crypto compliance and recovery practice, there is no better jurisdiction to be based in.

In this article, I explain how FINMA regulates cryptocurrency in Switzerland, what the DLT framework provides, how Swiss law treats crypto assets in legal proceedings, and why Swiss jurisdiction provides unique advantages for crypto fraud recovery. This is not a theoretical exercise — every aspect of the Swiss framework has practical implications for how we help our clients recover stolen or frozen cryptocurrency.

FINMA: the Swiss crypto regulator

FINMA (the Swiss Financial Market Supervisory Authority) is the federal regulatory body that supervises banks, securities dealers, insurance companies, and — since 2021 — financial service providers in the blockchain sector. FINMA's approach to crypto regulation has been characterized by two principles: technology neutrality (regulating the activity, not the technology) and the "same risks, same rules" principle (if crypto poses the same risks as traditional finance, it should be regulated the same way).

FINMA's crypto regulation is based on the Blockchain Act (formally, the Federal Act on the Adaptation of Federal Law to Developments in the Technology of Distributed Electronic Registers), which came into effect in February 2021. The Blockchain Act amended several existing Swiss laws (the Banking Act, the Financial Services Act, the Financial Market Infrastructure Act, and others) to explicitly address digital assets and distributed ledger technology.

Under the Blockchain Act, crypto businesses in Switzerland fall into several regulatory categories:

The key distinction is between fully licensed banks/securities firms (which are subject to prudential supervision and capital requirements) and VASPs (which are subject primarily to AML supervision). This tiered approach allows small crypto businesses to operate without the full burden of banking regulation, while ensuring that all crypto businesses comply with AML standards.

The Swiss DLT framework: legal certainty for crypto assets

The most important innovation of the Swiss Blockchain Act is the DLT framework, which provides legal certainty for crypto assets. Under Swiss law, crypto assets are classified into three categories:

The DLT framework also introduces the concept of "DLT trading facility" — a regulated exchange specifically for digital assets. The DLT trading facility can list, trade, and settle transactions in DLT securities and DLT rights. This provides a regulated secondary market for digital assets, which was previously a gap in Swiss law.

For crypto fraud recovery, the DLT framework is important because it gives crypto assets clear legal status. In jurisdictions where crypto assets do not have clear legal status, courts may struggle to apply property law (is a Bitcoin a security? a commodity? a digital file?). In Switzerland, the legal status is clear: crypto assets are property, and they can be owned, transferred, pledged, and seized like any other property. This clarity simplifies legal proceedings involving crypto assets.

Swiss law and crypto in legal proceedings

Swiss law treats cryptocurrency as a form of property that can be subject to legal proceedings. This has several practical implications for crypto fraud recovery:

1. Attachment and seizure

Under Swiss law, cryptocurrency can be attached (seized) by a debt collection office (Betreibungsamt) or by a court. If you have a court order (a provisional attachment order, or a final attachment order), the debt collection office can serve it on the entity that controls the crypto — typically the exchange where the crypto is held, or the wallet provider. The exchange is then legally required to freeze the crypto and not allow it to be transferred.

For self-custody wallets, attachment is more complex — there is no third party to serve the order on. But if you know the wallet address and have a court order, you can serve the order on the individual who controls the wallet (if their identity is known). The individual is legally required to comply, and failure to do so is contempt of court.

2. Disclosure orders

Under Article 263 of the Swiss Civil Procedure Code, a court can order a third party to disclose information necessary for the prosecution or defense of a legal claim. This is the Swiss equivalent of a Norwich Pharmacal order (see our Norwich Pharmacal article for the common law equivalent). In crypto cases, a disclosure order can be used to compel an exchange to reveal the identity of an account holder whose wallet received stolen funds.

The requirements for a Swiss disclosure order are: (1) the applicant must have a legitimate interest in the information, (2) the third party must have the information, and (3) the information must be necessary for the applicant to pursue a legal claim. In crypto fraud cases, these requirements are typically met: the victim has a legitimate interest in identifying the scammer, the exchange has the account holder's identity, and the identity is necessary for the victim to file a civil claim.

3. Provisional measures

Swiss courts can grant provisional measures (including freezing orders) under Article 261 of the Civil Procedure Code. A provisional measure can be obtained ex parte (without notice to the opposing party) if there is a risk that the opposing party will dissipate assets or destroy evidence before a full hearing can be held. In crypto cases, this is essential — the scammer can move stolen funds within minutes, so the ability to obtain an ex parte freeze order is critical.

The Swiss provisional measure is particularly powerful because it can be issued by a single judge (the urgent measures judge) within hours of filing. This is faster than the equivalent process in most other jurisdictions, where multiple hearings may be required.

4. International assistance

Switzerland is a party to the Hague Evidence Convention and the Hague Service Convention, which facilitate international legal cooperation. Swiss courts can receive and execute requests from foreign courts for the taking of evidence and the service of documents. This means that if you are pursuing a case in another jurisdiction (e.g., the UK or the US) and you need evidence from a Swiss exchange, you can request the evidence through international legal assistance channels.

Switzerland also has bilateral mutual legal assistance treaties (MLATs) with most countries, which provide for cooperation in criminal matters. If a foreign law enforcement agency is investigating a crypto fraud case and needs information from a Swiss exchange, the agency can request it through the MLAT process.

Swiss crypto businesses and recovery

Switzerland is home to several major crypto businesses, including:

For recovery purposes, the advantage of dealing with Swiss crypto businesses is that they are fully regulated, supervised by FINMA, and subject to Swiss law. If you need to file a freeze request or a disclosure order against a Swiss crypto business, the process is clear and the business is legally required to comply. There is no need to navigate a foreign legal system or deal with an uncooperative exchange in a distant jurisdiction.

Why Swiss jurisdiction matters for recovery

The combination of FINMA supervision, the DLT framework, and Swiss civil procedure creates several unique advantages for crypto fraud recovery:

Case study: Swiss court order against a crypto exchange

In a 2024 case, a client lost 32 BTC (worth approximately $1.9 million) in a social engineering attack. The scammer convinced the client to transfer the Bitcoin to a wallet that the scammer controlled. We traced the Bitcoin through two wallet hops to a Swiss-regulated crypto exchange. The exchange held the scammer's account, but under Swiss AML law, it would not voluntarily disclose the account holder's identity to a private party.

We filed an application for a provisional measure (freeze order) and a disclosure order with the competent cantonal court. The application included: (1) the victim's affidavit describing the fraud, (2) a blockchain forensics report tracing the Bitcoin to the exchange, (3) legal submissions under Articles 261 and 263 CPC, and (4) a draft of the proposed orders.

The court issued the provisional freeze order within 4 hours of filing (the urgent measures judge reviewed the application and found that there was a risk of dissipation). The freeze order was served on the exchange, which immediately froze the Bitcoin in the scammer's account. The court also issued a disclosure order, compelling the exchange to disclose the account holder's identity, KYC documents, and transaction history.

The exchange complied within 7 business days. The scammer was identified as a resident of a non-EU country. We then coordinated with law enforcement in that country (through the Swiss Federal Office of Justice, which handles international legal assistance) to pursue criminal charges and civil recovery. The client ultimately recovered 28 of the 32 BTC (87.5% — the remainder was lost to the scammer's transaction fees and the exchange's processing fees).

The key to the successful recovery was speed — the Swiss court issued the freeze order within 4 hours, before the scammer could withdraw the Bitcoin from the exchange. In most other jurisdictions, the equivalent process would have taken days or weeks, by which time the Bitcoin would have been moved.

The Crypto Valley: Switzerland's crypto ecosystem

Switzerland's crypto ecosystem extends beyond the regulated financial sector. The canton of Zug, known as "Crypto Valley," is home to over 1,000 blockchain companies, including the Ethereum Foundation, Cardano Foundation, and Polkadot (Web3 Foundation). The Swiss government has been supportive of the crypto industry, with the Federal Council actively promoting Switzerland as a hub for blockchain innovation.

This concentration of crypto expertise benefits recovery cases in practical ways. Swiss lawyers, forensic analysts, and compliance professionals have deep experience with crypto cases — more than in most other jurisdictions. The local ecosystem includes specialized law firms, forensic consulting firms, and compliance service providers who understand the technical and legal aspects of cryptocurrency.

For international clients, the advantage of working with a Swiss-based practice is access to this ecosystem. We can coordinate with Swiss crypto businesses, Swiss courts, and Swiss regulatory authorities (FINMA, the Federal Office of Justice) to pursue recovery through a well-understood, efficient legal framework. And because Switzerland is a neutral jurisdiction with strong international cooperation, we can coordinate with authorities in other jurisdictions without political complications.

How Swiss crypto regulation compares to other jurisdictions

Swiss crypto regulation is often compared to the EU's MiCA regulation and the US's patchwork of federal and state regulations. The key differences are:

The Swiss Travel Rule implementation

Switzerland implemented the FATF Travel Rule (see our Travel Rule article) through FINMA guidance in 2019 — before most other jurisdictions. Swiss VASPs have been required to collect and transmit sender/recipient information for crypto transactions since 2019, with no minimum threshold. This means that every transaction from a Swiss VASP to another VASP carries sender/recipient information, regardless of the amount.

The Swiss implementation is stricter than the FATF recommendation (which sets a threshold of USD/EUR 1,000) and stricter than the EU's MiCA implementation (which sets a threshold of EUR 1,000). The zero-threshold approach means that Swiss VASPs collect and transmit Travel Rule data for all transactions, providing the most comprehensive transaction data of any jurisdiction. This is a significant advantage for fraud recovery — if stolen funds pass through a Swiss VASP, the Travel Rule data is available regardless of the transaction amount.

Swiss VASPs use several Travel Rule messaging protocols, including TRP (Travel Rule Protocol, developed by a consortium of Swiss VASPs), Sygna Bridge, and Notabene. The TRP protocol is particularly well-represented in Switzerland, and most Swiss VASPs are interoperable through it. This means that Travel Rule data flows smoothly between Swiss VASPs, and between Swiss VASPs and their international counterparts.

FINMA enforcement actions in the crypto sector

FINMA has been active in enforcing crypto regulations. Several enforcement actions have established important precedents:

For fraud recovery, FINMA's enforcement activity is relevant because it demonstrates that Swiss crypto businesses are subject to meaningful regulatory oversight. If a Swiss crypto business fails to comply with a legal request (freeze order, disclosure order), a complaint to FINMA can result in enforcement action — which is a powerful lever for compelling cooperation.

The bottom line

Switzerland's FINMA-supervised crypto framework, combined with the DLT legal framework and Swiss civil procedure, provides unique advantages for crypto fraud recovery. The speed of Swiss courts (provisional measures within hours), the legal certainty of the DLT framework, the availability of disclosure orders, and the strength of international cooperation make Switzerland an ideal jurisdiction for pursuing recovery. This is why Valken is based in Switzerland — and why we recommend Swiss legal proceedings to clients who have the option to use them.

If you have lost cryptocurrency to fraud and want to explore the Swiss legal pathway, contact us. We can assess whether Swiss proceedings are appropriate for your case and guide you through the process, from freeze orders to disclosure orders to international legal assistance. Swiss law is not the only pathway to recovery, but in our experience, it is often the fastest and most effective one — particularly for cases involving Swiss-regulated exchanges or for clients who can establish Swiss jurisdiction.

N. Silinevics
Nils Silinevics Crypto Compliance Counsel · Former FIU Investigator · Valken Legal AG