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The stringent rules imposed by Switzerland on initial coin offerings (ICOs) is hurting the small but wealthy nation’s status as a cryptocurrency haven, declared Bitcoin investor and tech billionaire Tim Draper.

Draper addressed the Crypto ICO Summit in Zurich via Skype link and said: 

“You [Switzerland] had the tiger by the tail, everyone was going to do their ICOs through you, and all you had to do was make it easier for everybody. Instead, the regulatory bodies got in there. They made it tougher. They put more and more barriers up, so people went to Singapore and Gibraltar and Cayman and to other places."

He went on to say:

"Switzerland had an enormous opportunity, and I think they have lost their opportunity. If you have heavy regulation, you lose your business. Maybe they can bring it back by being more regulatory light. Governments now have to compete for us. We can move, we can go from country to country.”

However, Draper did not specify which particular Swiss regulation was referring to.

FINMA guidelines on cryptocurrencies

In February this year, the Swiss Financial Market Supervisory Authority (FINMA) announced new guidelines on ICOs and said that ICOs would be treated on a case-by-case basis. FINMA also reiterated its confidence in the potentials of blockchain technology while pledging to initiate crackdowns against digital currency frauds and money laundering.

FINMA CEO, Mark Branson commented:

"The application of blockchain technology has innovative potential within and far beyond the financial markets. However, blockchain-based projects conducted analogously to regulated activities cannot simply circumvent the tried and tested regulatory framework. Our balanced approach to handling ICO projects and inquiries allows legitimate innovators to navigate the regulatory landscape and so launch their projects in a way consistent with our laws protecting investors and the integrity of the financial system."

Crypto haven

Drapers’ comments are contrary to the perception of the blockchain community that Switzerland is emerging as the center of the cryptocurrency craze as the nation is attracting investors to relocate there.

The country's biggest city, Zurich, had set up its first [G9] Bitcoin ATM in 2015 and a year later, the Swiss national railway allowed the public to buy cryptocurrencies  at more than 1,000 distributors across Switzerland.

Projects like Tezos, Status Network, Bancor, as well as initially Ethereum were handled by Swiss experts before the compliance rules changes.