ICOs Will Tarnish Zug’s Reputation, Swiss Officials Express FearMarch 26, 2018
Cryptocurrency entrepreneurs, community organizations, and foundations have significantly helped in putting Zug, a lightly-populated Swiss canton, on the world’s business map. The local administration has also played a significant role, providing a very welcoming environment for the crypto industry. However, some officials have expressed their fear for possible negative repercussions of the trade citing such examples as American regulatory backlash and bad press.
Lamborghini Robin Hoods
A more recent report published by the Financial Times details that despite the various successes Zug (also commonly known as the “Crypto Valley”) has had before in attracting investors in various crypto activities, some people fear that the canton will attract unwanted attention. One Swiss finance specialist is quoted to have commented, “I am just waiting to hear Washington call Bern and then ask; what exactly are you doing over there in Zug?” Another insider commented, “They are saying that they’re different to banks and that they’re Robin Hoods, but we are seeing Robin Hoods drive around in Lamborghinis.”
Apart from the flashy displays of wealth, various critics have echoed other familiar complaints. A local Green Party councilor, Andreas Hurliman said that “my biggest worry is that Zug’s standing will be substantially lowered worldwide by the entire situation. You have no idea from which point to which one the money flows, and, for instance, whether or not it is drug money.” Mr. Hurliman also said that the acceptance of BTC payments by the council was an obvious “marketing gag.”
On their part, crypto entrepreneurs seem to be very pleased about Zug’s regulation and politicians. The only major issue the traders raised in the Financial Times report was the reluctant cooperation the local banks showed, which is, of course, a problem they can bypass by getting banking services elsewhere, say, Liechtenstein.
Notably, the key concern arising from the Financial Times’ report is that Initial Coin Offerings could mess things up in a manner that will attract foreign pressures and consequently harshen the region’s legal framework for others. Jan Seffinga, a Blockchain specialist at Deloitte explained that “Switzerland is still under pressure to strictly follow “clean money” strategies. It was very hard work that got this country off the blacklists and, of course, there is no appetite for getting it back on the blacklists.”
Bitcoin Association Switzerland’s founder, Luzius Meisser, pointed out that “these Initial Coin Offerings need blind trust, particularly in the founders. There isn’t much you can do if the raised money is misappropriated.” Zug’s financial director, Heinz Tannler also said that “the risk comes when we have “black sheep.” We’ve our eyes open, but, of course, every opportunity comes with risks.”
Still, other voices seem to be quite overwhelmed by the quick developments of Crypto Valley. The town’s council president, Mr. Dolfi Muller, recently said, “we are playing the background music…we do not have very great plans, we do not want to become a “smart city” such as Dubai. It is step by step. It is Asterix against Rome.”