FINMA Publishes Guidance 08/2023 on Staking

20.12.2023|Hans Kuhn

FINMA has published the Guidance 08/2023 on its supervisory practice in the area of staking. In it, FINMA returns to its change in practice announced in summer 2023, according to which staked assets should have been considered public deposits and a banking licence would therefore generally have been required for staking services (see our post). This change in practice was unanimously rejected by the crypto industry. In the Guidance, FINMA now clarifies that staked crypto-based assets generally qualify as custody assets and that staking by unauthorised market participants is still possible.

The Guidance only applies to so-called custodial staking, where the client transfers the crypto-based assets to a service provider. In non-custodial staking, customers retain exclusive control over the withdrawal keys, which is why there is no safekeeping or receipt of assets by third parties; regulatory issues do not arise in this context. A sub-variant of custodial staking are so-called staking chains, in which the custodian passes on the assets to be staked to a third party who operates the validator node and holds the withdrawal keys. Finally, it is also clear that there is no segregability if the custodian operates staking for its own account. In such constellations, a proprietary transaction within the meaning of Art. 1a para. 1 let. b Banking Act must be assumed.

In principle, FINMA recognises that staked assets can be segregated in the case of custodial staking. The legal basis and the requirements that must be met for this differ depending on the case.

Direct Staking

With direct staking, an institution operates the staking itself and also has the power of disposal over the withdrawal keys to redeem the blocked crypto-based assets. FINMA's current assessment is that the crypto-based assets can be segregated under the following conditions in accordance with Art. 16 para. 1bis Banking Act:

  • specific instruction from the client on the type and number of crypto-based assets to be staked;
  • the crypto-based assets placed at a specific validator address and, after unstaking, at a specific withdrawal address can be clearly allocated to the authorised customers;
  • customers must be informed transparently and clearly about all risks (including slashing, lock-up period and risks in connection with the existing legal uncertainties in the event of bankruptcy);
  • Measures to minimise the operational risks resulting from the operation of a validator node (including business continuity management), in particular to avoid slashing and other penalties; and
  • Creation of a Digital Assets Resolution Package (DARP).

Under these conditions, staked assets in the bankruptcy of an institution supervised by FINMA must be segregated as safe custody assets in accordance with Art. 16 para. 1bis Banking Act.

Staking Chains

If an institution delegates the operation of the validator node to a third party (other banks or staking pool operators), Art. 16 para. 1bis Banking Act does not apply, as the institution only has a claim against the third-party provider. This can be treated as a claim held in trust within the meaning of Art. 16 para. 2 Banking Act and thus as a custody account value if the guidelines of the Bankers Association regarding fiduciary investments are complied with. The following conditions must be met in accordance with the Guidance:

  • the counterparty risks are limited by selecting a prudentially supervised institution with a good credit rating;
  • specific due diligence is carried out to ensure that the third-party provider is not operating without authorisation and that the third-party provider holds the relevant withdrawal keys itself;
  • the third-party provider designates the validator addresses (e.g. through an internal register) on which it holds the crypto-based assets of the custodians and informs the custodian of these;
  • the third-party provider has taken all necessary measures to limit the operational risks with regard to the validator node operation (validation errors or offline status), to exclude further penalties against the validator and to ensure business continuity.
  • If providers abroad are involved, they must also be subject to equivalent prudential supervision and offer the same legal certainty as Switzerland with regard to the bankruptcy treatment of crypto-based assets held in custody.

Staking by Unauthorised Market Participants

FINMA also states in the Guidance that market participants without a licence under banking law may continue to offer custodial direct staking on behalf of and for the account of clients, provided that the staked crypto-based assets are held in custody individually. This requires that a separate and assignable blockchain address (at the level of the original custody address, the staking address and the withdrawal address) exists for each client and that the provider itself has the withdrawal keys. Under these conditions, FINMA assumes that staked assets are segregable in accordance with Art. 242a SchKG. Naturally, these market participants are subject to the Anti-Money Laundering Act and must therefore be members of a self-regulatory organisation.


After the announcement of a change in practice in the summer of 2023 caused great concern, FINMA's clarification of the legal situation is very welcome. The categorisation of staked assets as public deposits would have been the worst possible solution. Not only would it have been of no benefit to clients, it would also have made it impossible for Swiss institutions to offer staking on competitive terms.

It is regrettable that the supervisory communication unduly emphasises the uncertainties regarding segregation. As the Blockchain Federation, among others, has convincingly explained in its Staking Circular, segregability is also given in the case of custodial staking, provided that the staking service provider has contractually undertaken to maintain the power of disposal over the tokens and that these are permanently available, e.g. by ensuring permanent access to the private keys. FINMA's concerns are all the less justified as it would itself decide on the interpretation of Art. 16 para. 1bis Banking Act as the competent bankruptcy authority in the event of bankruptcy.

The full supervisory communication can be downloaded here. Our partner Dr Hans Kuhn will be happy to answer any questions you may have on the subject of staking.