📅 Field note from: December 2017 | Last updated: May 2026 Originally written near the peak of the ICO boom from inside Zug; updated with eight years of retrospective in May 2026.
By December 2017, Zug was doing something it had never done before: it was loud.
Not loud in the way a city is loud — Zug is still Zug, population under 30,000, the lake still grey-green in winter, the cobblestone still quiet after 9 p.m. But the lobbies and coffee shops and the new floors of CV Labs were loud with a particular kind of noise. Somewhere between a startup pitch and a casino floor. Everyone had a whitepaper. Everyone needed to talk to someone who knew someone who knew a lawyer.
The ICO boom came to Crypto Valley in 2017. And from the inside, it looked nothing like the post-mortem stories that came later.
What the Numbers Said at the Time
In the first half of 2017, ICOs globally raised more than $1.5 billion. Switzerland captured a disproportionate share: by the end of the year, more than one quarter of all ICO funds had been raised through Swiss-registered entities, and five of the ten largest ICOs globally were Swiss-based. That included projects like Tezos, Bancor, and Status — all with Zug or Zurich foundations.
The headline number was Tezos.
The scale was incomprehensible to most people outside the space, and frankly to some inside it. A project had raised roughly the equivalent of a medium-sized Series B — except from a global pool of retail participants, in 13 days, with no equity and no formal securities disclosure. The legal structure that made this possible was the Swiss Stiftung: a non-profit foundation that could hold the funds for a defined purpose without being obligated to return them as investor profit.
That structure, as I wrote about in the Ethereum origin story, was exactly what Ethereum had used in 2014. By 2017, every project that could afford a Zug lawyer had copied it. The difference was that Ethereum had built the template carefully, with Mihai Alisie navigating Swiss regulatory groundwork for months before the presale. The 2017 cohort was moving faster.
The Atmosphere in Zug, Which Nobody Wrote Down Accurately
The accounts of the ICO boom that circulate now tend to read as either hagiography or indictment. The reality in Zug in 2017 was more textured than either version.
CV Labs had opened earlier that year, and by mid-2017 the coworking floors were filling in a way that felt qualitatively different from the foundation-and-law-firm energy that had characterized Zug from 2014 to 2016. The Ethereum-era Crypto Valley had been dominated by legal professionals, accountants, and serious technical teams. The 2017 wave included all of those — but also people who were clearly still working out what they were building.
Conversations in the coffee queue were different. In 2015 or 2016, someone would tell you they were building a privacy-preserving protocol for financial data. In 2017, someone would tell you they were tokenizing attention economics for the creator economy, and they needed to get to 5,000 ETH by end of month.
This is not to say the 2017 cohort was fraudulent — most of it was not. But the bar for what constituted “launch-ready” had effectively disappeared. Switzerland’s ICO market attracted serious technical projects and aspirational whitepapers in roughly equal measure, with no mechanism to distinguish them publicly at the time of fundraise.
The lawyers were everywhere. MME — the Zug law firm that had set up the Tezos Foundation structure and which had been a quiet backbone of Crypto Valley for years — was overwhelmed. Other firms filled the gap. A baseline Zug foundation setup for an ICO was running anywhere from CHF 15,000 to CHF 50,000 depending on complexity. This was considered a bargain against the capital being raised.
Why Switzerland Was Different From Singapore and Cayman
By 2017, Crypto Valley had competition. Singapore’s Monetary Authority had positioned itself as ICO-friendly. The Cayman Islands were offering simpler foundation structures. Malta was making aggressive overtures. Why were projects still choosing Zug?
Three reasons, from what I observed:
FINMA engagement, not silence. Other jurisdictions offered regulatory ambiguity as a feature — essentially, “we haven’t said no, so go ahead.” FINMA had been in active dialogue with blockchain projects since 2014. That engagement was not permissive in every case, but it meant projects in Switzerland knew where they stood, or could find out. A FINMA no-action letter — even an informal one — carried more weight than operating in a jurisdiction that simply hadn’t gotten around to the question yet.
Swiss banking relationships. Zug had developed an ecosystem of banks willing to take on crypto-related accounts by 2017. This sounds obvious until you remember that in 2017, getting a bank account for a crypto project in most jurisdictions meant either a bank that specialized in high-risk accounts at high fees, or a flatly closed door. Swiss cantonal banks and some private banks had, by this point, decided that properly structured Crypto Valley foundations were bankable. That would change after the Tezos scandal — but in mid-2017, it was a real competitive advantage.
Peer density. A founder arriving in Zug in 2017 could get to the right lawyer, the right auditor, the right Ethereum developer, the right cantonal official, and the right previous-generation project within a short walk or a short train ride. Singapore and Cayman could not replicate that cluster in 2017. The Crypto Valley Association, formally established in January 2017, had given structure to what had previously been an informal network.
Tezos: The Story That Defined the Era
Tezos was supposed to be the proof case that Crypto Valley’s approach could produce something transformational at scale.
The project had a genuine technical thesis: self-amending blockchain governance, designed to avoid the contentious hard forks that had split the Ethereum community in 2016. Arthur and Kathleen Breitman had been developing the protocol since 2014. The Zug foundation structure, set up in April 2017 with MME’s assistance, was designed to give the project a legally defensible fundraise vehicle.
The ICO ran July 1-13, 2017. It raised $232 million in Bitcoin and Ethereum — 65,627 BTC and 361,122 ETH at then-current prices. It was, at that moment, the largest fundraise in crypto history. In Zug, people noticed.
What happened in October 2017 was less celebrated.
The Breitman couple and Johann Gevers — the foundation’s president, a well-known Crypto Valley figure and co-founder of the Swiss Bitcoin Association — entered a public dispute. The Breitmans accused Gevers of attempting to award himself a $1.5 million bonus from foundation funds, representing it internally as being worth only $300,000. Gevers denied manipulation. An independent audit found no conclusive evidence either way. The specifics were murky and contested from the start.
What was not murky was the structural problem the dispute exposed.
Under Swiss foundation law, the foundation’s board controls the assets. This is the same feature that made the structure attractive for ICOs: funds cannot be distributed back to founders as profit, making the fundraise legally defensible. But the corollary is that if the foundation board and the project founders disagree, the founders have limited legal recourse. The $232 million sat in a Zug foundation controlled by a board that the Breitmans wanted to remove but could not do so quickly under Swiss law.
The dispute played out publicly from October 2017 through early 2018. Gevers eventually resigned in February 2018, receiving $400,000. The foundation board was reconstituted. Tezos went live in September 2018 — delayed by months. Class-action lawsuits were filed in the United States. Some Swiss media, in moments of frustrated commentary, took to calling the episode “Klepto Valley.”
The Tezos story did not kill Crypto Valley. But it demonstrated something important about the ICO model that the boom period had obscured: the Swiss foundation structure was excellent at holding funds and poor at resolving governance conflicts between founders and foundation officers. Projects that were adopting the structure because it was the done thing in Zug, without thinking through what happened if internal relationships broke down, were exposed.
What the Banks Did Next
One consequence of the Tezos dispute that did not make international headlines was its effect on Swiss banking relationships for crypto businesses.
By late 2017, certain Swiss cantonal banks had developed what might charitably be called a pragmatic relationship with crypto foundations. They understood the basic structure, they had done the KYC/AML work on a handful of serious projects, and they were willing to hold accounts for properly documented Zug foundations. The Tezos scandal changed the internal risk calculus.
Swiss banks pulled back. The window for relatively smooth crypto business banking — which had never been comfortable, but had existed — narrowed significantly in late 2017 and early 2018. Projects that arrived in Zug in the first half of 2017 with their foundation set up and their banking established were fine. Projects that arrived after October 2017 found the environment materially harder.
This banking pullback, combined with the beginning of the crypto bear market in January 2018, compressed the Zug ICO scene faster than the global numbers might suggest. Switzerland went from second globally in ICO fundraising in 2017 to sixth in 2018. The infrastructure remained, but the easy access was gone.
FINMA Steps In: February 16, 2018
The other defining event of the transition period was not a crisis — it was a document.
On February 16, 2018, FINMA published its ICO guidelines. They were the first major regulatory framework from a significant financial regulator in the world to address ICOs systematically. The approach FINMA took was taxonomic rather than prohibitory: instead of declaring ICOs legal or illegal as a category, FINMA distinguished between token types.
Payment tokens (cryptocurrencies) were subject to anti-money laundering requirements but not securities law. Utility tokens — tokens providing access to a specific service at launch — would not be treated as securities if their sole purpose was access rights. Asset tokens — tokens representing an asset, a company stake, or an earnings stream — would be treated as securities and require corresponding disclosure and licensing.
The response in Zug was mixed, and the mix is interesting.
Lawyers generally welcomed the clarity. Projects that had been operating in the ambiguity of no-guidelines could now structure their tokens explicitly as utility tokens and have a clear framework for compliance. Compliance costs would go up, but the framework was coherent.
Some founders were frustrated. The utility token carve-out sounded good until you read the condition: “utility tokens will not be treated as securities if their sole purpose is to confer digital access rights and they can actually be used at issuance.” That last phrase — “can actually be used at issuance” — disqualified most ICOs that had raised funds for projects still under development. A utility token for a platform that did not yet exist was, under FINMA’s reading, closer to an asset token than a utility token.
The informal legal vacuum that had made the 2017 boom possible was gone. FINMA had received 155 detailed regulatory queries on ICOs by the end of 2018. They investigated 60 ICOs that year. More than ten were found to violate anti-money laundering rules; enforcement proceedings were started against eight.
The Projects That Made It Through
Not every 2017-era project collapsed. It is worth being specific about what survival looked like from Zug.
Tezos itself eventually launched. The technical project — self-amending governance, proof-of-stake consensus — delivered on its core thesis, even if the foundation drama delayed it and the lawsuits followed it. The XTZ token trades today. The Tezos Foundation, reconstituted after the Gevers departure, became one of the better-run crypto foundations in Switzerland by most accounts.
Bancor, which had raised $150 million in June 2017 — the record before Tezos broke it weeks later — built its decentralized exchange protocol and operates as a functioning DeFi product. It went through the bear market, cut operations, and emerged smaller and more focused.
Status, which raised $64 million in June 2017 for a decentralized messaging application built on Ethereum, continued development. The 2017 ICO funded years of work on a product that remains live.
The survival pattern was not random. Projects that had raised into Swiss foundations with serious technical teams, clear use-of-proceeds plans, and the discipline to continue development through a two-year bear market while managing the foundation governance honestly — those projects mostly made it through. Projects where the foundation was primarily a vehicle and the technical work was subordinate to the fundraise — those did not.
Switzerland’s regulatory engagement, specifically FINMA’s ongoing dialogue even through the enforcement period, helped. Projects that engaged proactively with the framework FINMA published had a clearer path than those operating in regulatory ambiguity elsewhere.
Crypto Winter in Zug: What 2018 Actually Felt Like
The bear market that began in January 2018 compressed the ICO scene faster than the global narrative suggests. Bitcoin peaked at roughly $19,783 in December 2017. By February 2018 it had dropped more than 50%. By December 2018 it would reach $3,122.
In Zug, the transition was visible in texture rather than in sudden crisis. CV Labs did not empty out — it expanded its floor space to three floors by September 2018, which tells you something about the institutions that remained. The consultants and lawyers and auditors who had built their practices around the ICO boom had diversified enough to survive the volume decline. The Crypto Valley Association’s roster continued to grow.
But the energy was different. The coffees that had been pitches became conversations. The whitepapers stopped. People who had arrived in 2017 looking to raise quickly were making decisions: stay and build, or fold and go home.
The ones who stayed built the next layer of Crypto Valley. The SEBA and Sygnum banking licenses in 2019 — covered in the field note on FINMA’s first crypto banking licenses — required the kind of institutional trust that came specifically from surviving 2018 with your regulatory record intact. The crypto winter was, from inside Zug, a sorting mechanism. How the ecosystem actually held together through those two lean years — which companies stayed, what changed in the texture of daily life here — is its own field note on how Zug’s Web3 ecosystem survived 2018-2019.
What the ICO Era Changed That Did Not Change Back
Eight years later, three things from the 2017-2018 period seem durable.
First: the foundation structure, stress-tested by Tezos, got better. Swiss crypto foundations post-2018 tend to have more explicit governance documentation, clearer provisions for founder-board conflict, and more rigorous auditing requirements. The template did not break; it improved under pressure.
Second: FINMA’s engagement approach became a model. The token classification framework from February 2018 — payment, utility, asset — was adopted or referenced by regulators in other jurisdictions. What those guidelines revealed about Switzerland’s underlying regulatory philosophy, and why classifying tokens by function rather than banning them was such a consequential choice, is worth its own read: FINMA’s ICO guidelines in 2018. Switzerland’s willingness to classify rather than prohibit set a template that shaped subsequent regulatory conversations globally, including elements of what eventually became MiCA on the EU side. For how those two frameworks compare today, the MiCA vs FINMA field note covers the current landscape.
Third: Crypto Valley’s peer density — the thing that actually differentiated Zug from Singapore and Cayman in 2017 — survived the winter. By the time the 2020 bull market arrived, the infrastructure that had built up through 2017 and held through 2018-2019 was more robust than it had been at the boom’s peak. The companies that survived were more operationally serious. The legal and compliance ecosystem was more sophisticated.
The ICO boom was not, from this vantage point, a bubble that destroyed value and left nothing behind. It was a very rapid accumulation of capital and talent into a small geography, followed by a compression that removed the least committed participants and left behind a stronger core. The projects that made it through funded the institutional infrastructure that defined Crypto Valley’s next chapter.
That chapter — the Crypto Valley of 1,749 companies, $728 million in disclosed 2025 investment, the banking licenses and the DLT Act and the FINMA guidance framework — is what the 2026 snapshot covers. It did not emerge from nothing. It emerged from a very loud few years in which a lot of money moved through a small city in Switzerland, and the city’s regulatory and legal infrastructure absorbed it, sorted through it, and came out changed.
Related field notes: Why Ethereum Was Born in Zug — the 2014 legal template that the ICO boom borrowed and stress-tested. When FINMA Gave Crypto Its First Banking Licenses — what 2019 looked like after the Crypto Winter, when the projects that survived got institutional recognition. What Crypto Valley Actually Looks Like in 2026 — the ecosystem that grew from this foundation.