Buy Bitcoin & Crypto in Switzerland

Bitcoin & Cryptocurrency Trading in Switzerland

Buying Bitcoin in Switzerland is pretty easy thanks to the government's crypto friendly attitude (more on that below).

In November 2022, a change by the Swiss financial regulator will introduce new requirements for crypto transactions. Specifically:

• Identity Proof: Customers will need to prove their identity if they make transactions that total 1,000 Swiss francs ($1,000) or more over a monthly period when they swap crypto for cash or another anonymous form of money.

The Financial Market Supervisory Authority (Finma) provided reasoning in a recent report:

• Illicit Trade: "Virtual currencies are often used as a payment instrument for illicit trade, notably in drug trafficking, on the darknet, or for the payment of ransoms after cyberattacks."
• Money Laundering Risks: "The risk of money laundering in the domain of virtual currency is reinforced by potential anonymity and by the speed and cross-border nature of transactions."

However, this change raised concerns among citizens and crypto companies because:

• Customer Burden: It's perceived as burdensome on customers.
• Data Security: The storage of customer data becomes more susceptible to hacking.

Before diving into the world of Bitcoin, there are crucial security measures to consider:

• Hardware Wallets: Ensure you have a secure hardware wallet like a Coldcard or TREZOR before signing up with any exchange.
• Centralized Exchanges: While Bitcoin's blockchain is immutable and safe from hackers, centralized exchanges such as Coinbase and Coinmama are vulnerable to attacks.
• Storage Caution: Storing small amounts of Bitcoin on an exchange might be acceptable, but it's risky, especially for larger amounts.
• Protection Priority: Safeguarding your Bitcoin should be paramount. Start with a secure form of cold storage that hackers cannot breach.

Once you're set with security:

• Steps to Buy: Obtain a wallet, pick an exchange, verify your identity, connect your preferred payment method, and start trading.
• Swiss Recommendation: If interested in a Switzerland-based exchange, consider Bity. As a Bitcoin ATM company based in Switzerland, they have 5 ATMs offering fast withdrawals and high limits.

Swiss Banks and Bitcoin

Switzerland's banking industry is known to safeguard wealth, which is why Bitcoin is a natural fit for the country.

Founded recently with a universal banking license, SEBA Bank AG has a plethora of services, from fiat currency storage to crypto custody (they manage your cryptocurrency).

SEBA's home page

The Swiss startup boasts an impressive range of features:

• Fiat Currencies: It supports multiple fiat currencies including American dollars, Singaporean dollars, and Hong Kong dollars.
• Crypto Debit Card: One notable offering is their crypto-connected debit card. This unique card auto-converts crypto to traditional currency in the backend, enabling its use in everyday commercial settings and drawing from a cryptocurrency balance.

SEBA Bank AG: This institution exemplifies Switzerland's long-standing tradition of wealth protection, now extending its expertise into the crypto domain.

For those looking to buy Bitcoin in Switzerland:

• Cryptocurrency Exchanges: One of the simplest methods is via cryptocurrency exchanges. Numerous exchanges offer Bitcoin in Switzerland. Selection depends on factors such as transaction fees, withdrawal limits, payment modes, and verification procedures. You can choose an appropriate one based on our provided list and your individual needs.
• Wallet Requirement: While some exchanges might mandate having a personal wallet for Bitcoin purchase, even if not compulsory, owning one boosts security. A hardware wallet is particularly recommended. If without a wallet, consult our guide on the Best Bitcoin and Cryptocurrency Wallets for recommendations.

Exchange Hacks and Crypto Scams in Switzerland

Bancor Hack

In July of 2018, the "decentralized" exchange Bancor, based out of Israel and Switzerland, announced that hackers had stolen ~$23.5M in crypto assets.

These included:

• $12.5 million in Ether
• $1 million in Pundi X’s NPXS token
• $10 million in Bancor’s BNT

This hack occurred when "a wallet used to upgrade some smart contracts was compromised", according to Bancor's spokesperson.

Bancor raised over $150M during its Initial Coin Offering the previous year.

The lesson to learn from the Bancor hack is that just because someone claims their exchange is decentralized does not mean that the wallets can't be hacked or that the software does not have critical bugs that leave customers vulnerable.

Charlie Lee, Litecoin founder, put it best:

A Bancor wallet got hacked and that wallet has the ability to steal coins out of their own smart contracts. 🤦‍♂️

An exchange is not decentralized if it can lose customer funds OR if it can freeze customer funds. Bancor can do BOTH. It's a false sense of decentralization. https://t.co/22UYygIhEF

— Charlie Lee [LTC⚡] (@SatoshiLite) >July 10, 2018

E-Coin Scam

The Swiss Financial Market Supervisory Authority (Finma) has blocked $2M worth of funds sent to Quid Pro Quo Association for issuing E-Coins. Quid Pro Quo claimed that E-Coin was a cryptocurrency, yet it was discovered that there was no Blockchain, and the coins simply existed on a database held on Quid Pro Quo's servers.

According to the statement from Finma,

The scheme also promised to back the coins with physical assets, which it had failed to do. There were also apparently two other scam currencies, but these currencies were not named in the warning from Finma.

Mining Bitcoin in Switzerland

The cost of purchasing expensive hardware aside, mining takes time and energy (literally) which gets expensive.

Especially considering the price of electricity in Switzerland, buying Bitcoin from one of the exchanges listed above is your best bet.

Swiss citizens pay roughly 0.20 Franks per kWh, nearly double the cost of electricity in the United States, where mining is also not profitable.