Austria is one of the nations that does not see bitcoin and the altcoin industry as a threat to its economy. There are various crypto exchanges and bitcoin-related businesses in the country. Austrian authorities are set to regulate the digital currency industry just the way gold and other derivatives markets have been regulated. This move will prevent money laundering and offer a form of protection to investors.
The finance ministry is formulating same regulations for cryptocurrencies as it applies to gold and derivatives. These regulations will rule the Austrian crypto market and the European Union bitcoin industry.
Authorities believe that regulation will make it almost impossible for criminals to use virtual currencies in aiding their money laundering and other illegal operations. Also, the laws would make crypto exchanges to operate under the same rules with other financial instruments in the region.
In a statement on February 23, Loeger said that:
“Cryptocurrencies are significantly gaining importance in the fight against money laundering and terrorism financing, that’s an important aspect for the changes we support. We need more trust and more security.”
Cryptocurrencies are decentralized virtual money that enables people to make payments in a secure and anonymous way. These features of digital assets make it a very important tool for businesses. However, capabilities of cryptocurrencies also make it easy for bad people to use it for illegal activities.
The Minister has said that cryptocurrency exchanges, as well as Fintech firms, must carry out proper KYC and AML checks on clients and transactions above 10,000 euros ($12,300) must be brought to the notice of the financial intelligence unit.
This regulation also governs the Jewelry industry and companies that handle huge amounts of paper money.
Also, exchanges will be supervised by the FMA,
Initial Coin offerings must be based on “digital prospectuses” that must pass through the FMA to get approved.
For projects that are similar to share or bond offerings, such projects must desist from engaging in market manipulation, insider trading and other illegal practices or get penalized.
Scam ICO projects have become very common these days. Many fake projects have run away with people’s money. Austrian crypto investors have been victims of crypto-related investments. The latest one is the Optioment scheme that claimed to be a Costa Rica-based bitcoin fund.
Optioment promised investors large returns via arbitrage trading but ran away with their funds.