Austrian regulator adds more teeth to crypto laws as scam cases rise

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The Austrian Financial Market Authority has disclosed that crimes involving the use of digital currency have been on the rise across the country.

More than 60% of all confirmed financial scam cases involve products that trade in cryptocurrency and more stringent action is required, FMA said.

“We see a great need for stricter regulation,” FMA spokesperson Klaus Grubelnik said in remarks quoted by Bloomberg.

The official added that prosecution of fraud in relation to crypto trading proved to be a bigger challenge to financial authorities as they usually have to be carried out across borders.

Craking the whip vs scammers

Austrian regulators are working to add more teeth to electronic currency laws to contain the menace of such illicit enterprises while regulated trading in cryptocurrency continues to draw the interest of investors and crypto enthusiasts in the country.

Although Austria’s crypto scam investment has grown significantly, its traditional exchanges are still one of the main driving forces for virtual asset trading.

According to the FMA, it saw an increase in bogus offerings for cryptocurrencies on suspicious platforms, which are advertised on popular social networks like Facebook, TikTok, Telegram, or WhatsApp.

Interestingly, this rise in crypto fraud in Austria has also overshadowed that of precious metals and stocks which normally are the more popular commodities being targeted by scammers.

Bad guys go digital

“Fake offerings for stocks and gold have been in existence for far too long and these scams are now moving to digital assets because of the hype,” Grubelnik told Bloomberg.

In the first three quarters of 2019, crimes related to crypto resulted in a nearly $4.5 billion financial loss, which is equivalent to an increase of more than 150% from the $1.7 billion from the previous year, BizChina reported.

Meanwhile, despite the recent growth in crypto trading, a good number of the world’s leading financial institutions have so far distanced themselves from offering crypto-related services because of existing security worries.

Image courtesy of Journeyman Pictures/YouTube Screenshot

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