When Selling Cryptocurrency Becomes a Crime: How Swiss Prosecutors Are Punishing the Wrong People
A Swiss citizen and entrepreneur faces fraud and money laundering charges in two cantons for doing nothing more than selling his own stablecoins on a regulated marketplace. His story exposes a dangerous gap between digital finance and prosecutorial understanding.
Imagine you sell your used car through an online marketplace. The buyer pays you from their bank account. You hand over the keys. Later, police inform you that the money came from a fraud victim – the buyer had been tricked into sending funds by a scammer posing as a celebrity. You had no idea. You never spoke to the victim. You simply sold your car.
Now imagine you are arrested, detained, charged with fraud, labelled a money launderer, and every bank in the country closes your accounts. Your business collapses. Your reputation is destroyed. This is not a hypothetical. This is what happened to a Swiss entrepreneur whose only involvement was selling Tether (USDT) – a widely used stablecoin – on the Binance peer-to-peer marketplace.
To understand why this case is so troubling, one must first understand how P2P cryptocurrency platforms operate. Binance P2P is one of the world’s largest regulated digital asset marketplaces. The process is straightforward and tightly controlled:
A seller deposits their own cryptocurrency into the platform’s escrow system and publishes a sell offer at a fixed exchange rate. A buyer – who must first complete full identity verification (Know-Your-Customer, or KYC) – places an order. The platform locks the seller’s crypto in escrow. The buyer transfers fiat currency (Swiss francs, for example) to the seller’s bank account. Once the seller confirms receipt, the platform releases the crypto to the buyer’s wallet.
Critically, the seller and buyer never communicate directly about anything other than the trade itself. The seller cannot know where the buyer’s money originally came from. The seller cannot control what the buyer does with the purchased cryptocurrency afterward. The escrow system exists precisely to ensure that both sides fulfil their obligations – and to prevent fraud.
In this case, a fraud victim was deceived by a scammer impersonating a foreign celebrity into transferring money. That money, through intermediaries, ended up being used by a Binance user to purchase USDT from the accused. The accused sold his own cryptocurrency, received payment, and released the tokens – exactly as the platform is designed to work.
Yet prosecutors in two separate Swiss cantons decided to charge the seller: one for fraud (art. 146 Swiss Criminal Code) and the other for money laundering (art. 305bis Swiss Criminal Code). The reasoning in both cases appears identical: the seller’s bank account received money that could be traced back to a fraud victim. Therefore, in the prosecutors’ logic, the seller must be part of the scheme.
This reasoning is not just flawed – it is dangerous.
Swiss criminal law is built on a fundamental principle: no punishment without fault. Both fraud and money laundering require criminal intent (Vorsatz). Fraud under art. 146 requires the accused to have deliberately deceived someone. Money laundering under art. 305bis requires the accused to have known or suspected that funds originated from a crime and acted to obscure their origin.
In this case, the accused never communicated with the fraud victim. He never made any false representation. He never attempted to disguise the origin of any funds – the money arrived openly in his bank account from a KYC-verified Binance buyer. He sold his own digital assets in a standard commercial transaction. There is no deception, no concealment, and no intent.
Prosecutors appear to have committed a classic investigative error: they followed the money without understanding the market. In traditional banking, a direct transfer from person A to person B suggests a relationship. But in P2P cryptocurrency markets, the seller and the person whose money ultimately funds the purchase may be completely unrelated. The escrow platform sits between them, and the seller has zero visibility into the buyer’s source of funds.
The consequences of these prosecutions have been devastating. The accused was arrested and detained. Swiss banks flagged him as a fraud risk, resulting in the closure of all personal and corporate accounts. His businesses were crippled. His professional reputation as an economist and entrepreneur, built over decades, was destroyed. Even his ability to conduct normal financial life in his own country was effectively revoked.
All of this happened before any court heard the case. All of it was triggered by a prosecutor’s accusation, not a conviction. In a system that presumes innocence, the damage was done the moment charges were filed.
The accused proactively contacted the authorities, offering to travel to Switzerland, provide documentation, and clarify every transaction. His written submissions – sent in April 2025, August 2025, and November 2025 – explained the Binance P2P mechanism in detail. Despite this, the prosecution proceeded.
If this prosecution stands, it sets a chilling precedent. Every person who sells cryptocurrency on a regulated platform could be held criminally liable if a buyer’s funds turn out to have originated from a crime – even if the seller had no knowledge, no involvement, and no way to detect the problem.
By this logic, a supermarket cashier who accepts payment from a customer using stolen money could be charged with receiving stolen goods. A landlord whose tenant pays rent from embezzled funds could be charged with money laundering. The absurdity of the standard reveals its injustice.
Swiss law provides remedies for those wrongfully prosecuted. Article 429 of the Swiss Code of Criminal Procedure entitles an acquitted person to compensation for financial loss, legal expenses, and moral harm. But compensation after years of damage cannot undo the destruction of a career, a business, or a reputation. The real question is: why was the prosecution initiated at all?
This case highlights three urgent needs in Switzerland’s approach to digital finance and criminal justice:
First, prosecutorial education. Prosecutors handling cases involving cryptocurrency must understand how P2P platforms, escrow systems, and blockchain transactions actually work. Following a money trail without understanding the marketplace architecture leads to wrongful prosecutions.
Second, proportionality in enforcement. Arresting and charging a marketplace seller before establishing any evidence of intent or complicity violates the principle of proportionality. Accounts should not be frozen and lives upended on the basis of financial flow analysis alone.
Third, meaningful accountability for wrongful prosecution. When prosecutors destroy someone’s livelihood through charges that lack evidentiary foundation, the legal system must provide not only compensation but also mechanisms to prevent recurrence. An acquittal years later cannot restore what was lost.
Switzerland prides itself on its rule of law, its financial sophistication, and its fairness. A country that is home to one of the world’s most advanced financial ecosystems should be capable of distinguishing between a criminal and an innocent market participant. If it cannot, the message to every crypto trader, every fintech entrepreneur, and every digital economy participant is clear: in Switzerland, selling your own digital assets could cost you everything.
The case described above is based on real proceedings in multiple Swiss cantons. Names and identifying details have been withheld to protect ongoing legal proceedings. The accused maintains his innocence and is pursuing all legal remedies available under Swiss law.
About the issue: This article examines the intersection of cryptocurrency regulation and criminal prosecution in Switzerland, focusing on the risks faced by P2P sellers when investigative authorities fail to understand digital marketplace mechanics.