AUSTRIAN REGULATOR PLANS TO REGULATE CRYPTO-EXCHANGES AND ICO’S

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The Austrian Financial Market Authority (FMA) has already been noticed several times in recent weeks that it has set milestones in the regulation of cryptocurrencies. The FMA, for example, considered the Austrian INVIA‘s crypto-mining system to be an Alternative Investment Fund (AIM) and prohibited its operation. INVIA had raised funds from investors to invest in crypto-mining. FMA classified the INVIA business model as an AIF and thus operation requires a license. Such a license was not granted to INVIA and the FMA, therefore, ordered the closure. We have reported on the INVIA case several times.

This week, the FMA made it clear that it wanted to put the providers of cryptocurrency services under general regulation. This was reported by the Austrian medium DIE PRESSE.

For the purchase and sale of foreign exchange you need a mini-banking license“, says FMA Director Helmut ETTL. Bitcoin and Co. dealers such as COINTED, BTC MANAGEMENT or COINFINITY, however, could currently do this without authorization or license. “That’s not fair.” This situation is made worse by the FMA’s view that many fraudulent players are also active in the area of cryptocurrencies. The FMA, therefore, submitted two proposals to the Austrian policymakers on how services in the crypto area can be regulated in the future.

  • impose a “threshold-dependent” prospectus requirement for ICOs along the lines of that for securities. A minimum threshold of two million Euros would make “sense”, and ICOs should also be subject to a prospectus requirement regulations in future.
  • a concession requirement for traders in cryptocurrencies.

The FMA has already submitted the respective proposals to the Austrain Ministry of Finance, so it is assumed that they will soon be implemented by concrete laws. This would be a further trend-setting step by the FMA in the area of crypto.

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