The Federal Council's 2022 position

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The Federal Council published its report on decentralised finance on 16 December 2022 in response to a parliamentary postulate.

The report deliberately declined to define "sufficiently decentralised". It identified indicators: the absence of admin keys, the immutability of the code, the distribution of governance tokens, the absence of a dominant developer and the absence of an entity that profits from the protocol's operation. The author's practice is to assess each indicator and to document the assessment, because FINMA has made clear in individual cases that it will look through claims of decentralisation to the facts of control. The Federal Council's 2025 consultation on crypto institutions, discussed in Chapter IV and Part C, Chapter VI, revisited the question. It proposed to bring certain DeFi-adjacent service providers within a licensing regime. The author's understanding is that it did not propose to regulate protocols as such.

For general information only. This article does not constitute legal or tax advice, does not replace advice on an individual case and creates no lawyer-client relationship. It reflects the legal position as of October 2026.

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I am Of Counsel with KGP Legal LLC in Singapore, where I work with a global client base of successful entrepreneurs and their families, independent asset managers, commodity trading houses and other commercial clients. I am a German and Swiss attorney-at-law, also admitted as a solicitor in England & Wales and in Hong Kong. I divide my time between Zug in Switzerland, Singapore and Hong Kong. Since 2017 I have advised international clients on more than 700 crypto and digital asset projects. I also have extensive experience in cross-border litigation and arbitration in Singapore, Hong Kong and other markets in South-East Asia and Greater China.

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