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FINMA Crypto Licensing: What Exchanges Must Know in 2025

FINMA Crypto Licensing: What Exchanges Must Know in 2025

Michael James 20 July 2025 12 Comments

FINMA Crypto License Calculator

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License Overview

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Crypto Exchange

Facilitates crypto-fiat and crypto-crypto trades. Requires CHF 100k (AG) or CHF 20k (GmbH) capital.

📊

Crypto Broker

Acts as intermediary for third-party trades. Requires CHF 50k capital.

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VASP

Provides wallet, transfer, or payment services. Requires CHF 20k capital.

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DLT Trading Venue

Integrated trading, clearing, and settlement for DLT-securities. Requires CHF 100k capital.

Swiss regulators have built a reputation for clarity and rigor, and FINMA crypto licensing is the centerpiece for anyone wanting to run a cryptocurrency exchange in Switzerland. If you’re weighing the cost, timeline, or technical hurdles, this guide walks you through every step, from incorporation to the final approval, and highlights the most common pitfalls.

Quick Takeaways

Four main license categories cover most exchange models: Crypto Exchange, Crypto Broker, VASP, and DLT Trading Venue.
Incorporation as an AG (CHF 100,000) or GmbH (CHF 20,000) is mandatory; expect CHF 20‑100k total setup costs.
Typical processing time: 4-8 months from company formation to license issuance.
Key technical specs: multi‑sig wallets (3‑of‑5), 95% cold storage, RTO ≤4h, RPO ≤15min.
Switzerland offers institutional credibility but slower approval compared with Singapore or the EU’s MiCA passporting.

Who Is FINMA?

FINMA is the Swiss Financial Market Supervisory Authority responsible for overseeing banks, insurance companies, and increasingly, crypto‑related businesses. Established in 2007, FINMA issued its first crypto‑specific guidelines in February 2018 and has refined the regime several times, most recently in January 2023. Its mandate balances market integrity, consumer protection, and compliance with FATF AML standards.

Regulatory Pillars Behind the License

Three pieces of legislation shape the licensing landscape:

Anti‑Money Laundering Act (AMLA) requires stringent KYC, transaction monitoring, and the upcoming travel‑rule threshold of CHF 1,000 effective Jan12025.
Financial Market Infrastructure Act (FMIA) governs trading venues and sets the framework for DLT‑based securities.
Distributed Ledger Technology (DLT) Law introduced in 2020, enabling the DLT Trading Venue license and clarifying the treatment of tokenized assets.

Woman at a desk with holographic screens showing multi‑sig wallet, cold storage, and timeline.

License Types You’ll Encounter

FINMA tailors its licensing to the specific activities you plan to offer. Below is a concise comparison.

License Types vs. Core Requirements
License	Primary Activity	Capital Minimum	Key Technical Rule	Typical Use‑Case
Crypto Exchange License	Facilitate crypto‑fiat & crypto‑crypto trades	CHF100k (AG) / CHF20k (GmbH)	3‑of‑5 multi‑sig wallets, 95% cold storage	Retail & institutional exchange platform
Crypto Broker License	Act as intermediary for third‑party trades	CHF50k	KYC on every client, audit‑ready transaction logs	Broker‑as‑a‑service for other platforms
VASP License	Provide wallet, transfer, or payment services	CHF20k	AMLA‑compliant travel‑rule monitoring	Custodial wallet providers
DLT Trading Venue License	Integrated trading, clearing, settlement for DLT‑Securities	CHF100k	RTO ≤4h, RPO ≤15min, 1‑year penetration test	Security‑token exchanges, tokenized fund platforms

Step‑by‑Step: From Idea to Operational Exchange

Incorporate the legal entity. Choose AG for larger capital needs or GmbH for a leaner start. Register with the Commercial Register (ZeffirZert) - average 3-4months.
Secure the minimum share capital. Deposit CHF100k (AG) or CHF20k (GmbH) into a Swiss bank account. Note that 62% of applicants report difficulty opening a banking relationship.
Draft the documentation package. Include:
- Business plan with financial projections (3‑year horizon).
- AML/KYC policies aligned with AMLA.
- Security architecture: multi‑sig wallet design, cold‑storage strategy, disaster‑recovery plan (RTO/RPO).
- Proof of qualified compliance staff (average 3.2 full‑time compliance officers per licensed exchange).
Submit the application to FINMA. Upload via the e‑portal, pay CHF5‑15k in government fees, and attach auditor‑signed penetration test report.
Iterative review. FINMA typically provides written feedback within 10 business days per review round. Expect 1‑2 rounds before final approval.
License issuance. Once approved, you receive a “letter of authorization” and can begin onboarding clients.
Post‑license compliance. Ongoing AML reporting, annual audits, and for DLT venues, quarterly technical audits.

Cost Breakdown

Based on the 2024 Gofaizen & Sherle analysis, total out‑of‑pocket expenses range from CHF20k for a simple VASP to CHF100k+ for a full‑scale DLT Trading Venue. Here’s a typical split:

Incorporation & share capital: CHF20k - CHF100k
Consulting (legal, AML, technical): CHF8000‑15000 per month during preparation (average 3‑month engagement)
Government fees: CHF5000‑15000
Security audit & penetration test: CHF12000‑20000 (annual renewal)
Ongoing compliance staff salaries: CHF150000‑250000 per year for a mid‑size exchange

Why Choose Switzerland?

Switzerland’s “activity‑based” approach rewards businesses that can clearly define their functions. The benefits include:

Institutional trust: 78% of European crypto‑institutional trades flow through FINMA‑licensed venues (PwC 2024).
Access to a deep banking ecosystem and a stable legal environment (World Bank Political Stability Index #1).
Proximity to Crypto Valley - a hub of over 1,000 blockchain firms, providing talent and partnership opportunities.

Drawbacks to keep in mind:

Longer processing time (average 6‑8months) versus Singapore’s 6‑8weeks.
Higher capital threshold compared with U.S. Wyoming (USD100k) or EU MiCA’s more flexible passporting.
Substance‑over‑form rule can limit truly decentralized protocols, as seen in the 2023 DeFi guidance.

Woman on a balcony overlooking Crypto Valley with blockchain symbols in a sunset sky.

Checklist Before You Apply

Legal entity (AG or GmbH) registered and capital deposited.
AML/KYC program mapped to AMLA and FATF recommendations.
Security architecture documented: multi‑sig, cold storage, audit schedule.
Experienced compliance officer(s) hired or contracted.
Banking relationship secured - consider Swiss crypto‑friendly banks.
Business plan reflecting Swiss market size (CHF48.7bn annual volume, 3.2% global share).
Prepared to undergo annual penetration testing by a FINMA‑approved auditor.

Common Pitfalls & How to Avoid Them

Banking dead‑ends. Start conversations with potential banks early, present your AML framework, and be ready to demonstrate source‑of‑funds documentation.

Under‑estimating technical specs. FINMA expects a 3‑of‑5 multi‑sig model and 95% of client assets offline. Skipping the penetration test can delay approval by months.

Misclassifying activities. If you offer both brokerage and exchange services, you may need two licenses. A clear activity matrix helps streamline the review.

Future Outlook

FINMA’s September2024 update trimmed DLT Trading Venue approval to 6‑8weeks for applicants meeting predefined tech standards. The planned DeFi sandbox (Q22025) will relax capital requirements for non‑custodial protocols, potentially opening the door for more decentralized projects. Keep an eye on the revised AMLA (effective Jan2025) - the travel‑rule threshold will increase reporting obligations for high‑frequency traders.

Frequently Asked Questions

Do I need a FINMA license if I only provide a non‑custodial wallet?

Non‑custodial wallets that never hold client assets typically fall outside the definition of a VASP, but FINMA still requires you to register as an “information provider” and comply with AMLA reporting if you facilitate transfers.

Can a foreign company obtain a FINFINMA license without setting up a Swiss entity?

FINMA mandates a Swiss legal entity (AG or GmbH). Foreign firms can own the Swiss subsidiary, but the subsidiary must meet the capital and governance requirements.

How does the DLT Trading Venue license differ from a regular crypto exchange license?

A DLT Trading Venue can offer built‑in settlement, clearing, and custody for tokenized securities, whereas a Crypto Exchange License only covers trade matching. The DLT venue also faces stricter technical standards (RTO/RPO, annual penetration tests).

What is the typical timeline for FINMA approval?

From incorporation to final license, expect 4‑8months. The licensing phase itself (document review + feedback cycles) averages 1‑4months.

Are there any ongoing fees after the license is granted?

Yes. FINMA requires annual supervisory fees (approximately CHF5000‑10000) plus costs for mandatory audits, penetration testing, and compliance staff salaries.

Bottom line: Switzerland offers unmatched regulatory certainty for crypto exchanges, but you need to budget time and money wisely. Follow the checklist, align your tech stack with FINMA’s standards, and you’ll be on solid ground to tap into Europe’s most trusted crypto market.