Austrian Financial Market Authority presents interim report on new crypto regulations
The Austrian Financial Market Authority has presented an initial stocktaking one year after the licensing requirement for crypto service providers came into force.
The Austrian Financial Market Authority (FMA) issued a press release on 7 January on the current status of the registration obligation for Cryptosoft service providers, one year after it came into force at the beginning of 2020.
Control of crypto service providers
The registration obligation for crypto exchanges, wallet operators and other crypto service providers, which was introduced as part of a tightening of applicable money laundering regulations, has so far resulted in 40 applications, 18 of which have led to the issuance of a corresponding licence.
According to the FMA, the 18 registered companies are “for the most part service providers that operate electronic wallets and exchange platforms”. The following comment by FMA Executive Directors Helmut Ettl and Eduard Müller makes clear how important Austria’s top financial market supervisors treat the topic:
“The FMA pursues a clear zero-tolerance approach in the area of money laundering and terrorist financing. Aware of the risks associated with virtual currencies, we therefore closed another loophole last year and introduced the registration requirement here for companies operating in this area.”
The ongoing supervision of already registered companies will continue to be “a supervisory focus of the FMA in 2021,” the two executive directors added.
The FMA follows the “proportionality principle”, according to the statement, to which the respective supervision intensity is adapted. In addition to the size of the company, its “business model and the associated risks of being misused for money laundering or terrorist financing purposes” are taken into account. Risk factors, such as exploiting anonymity, identifying and mitigating the concealment of the origin of funds, would always be taken into account.
Similar legal situation in Germany
In Germany, too, crypto exchanges and custodians have been subject to a licensing requirement for about a year. Crypto assets such as cryptocurrencies and security tokens had been added to the list of official financial instruments by an amendment to the law at the end of 2019. As a legal consequence, the regulatory provisions existing for financial instruments also apply to crypto assets. The supervisory authority BaFin last informed about the status of the current licensing in December 2020.