Cryptocurrency businesses in Austria can now face a fine of up to €200,000 [US$222,500] if they fail to register with the country’s Financial Markets Authority (FMA).
Austria is widely viewed as one of the more crypto-friendly nations in the world. Related businesses have been largely unregulated in the country, save for certain business models where regulatory requirements had been decided on a case-by-case basis.
The regulatory climate has shifted somewhat as, per the agency’s official press release, cryptocurrencies have been included in an update to the Anti-Money Laundering (AML) regulations which went into effect on Friday, January 10, 2020 as part of the EU-wide 5th Anti Money Laundering Directive (AMD5).
Under the terms of the new regulations, crypto businesses filing applications must be able to prove to the FMA that they have “sufficient capability, coherence, and solvency to run the business.”
Businesses who have not registered with the FMA as of the effective date of the new regulations “may no longer offer their service in Austria from this date onwards.”
Unregistered businesses that continue to operate in Austria can be fined up to €200,000.
Do all crypto businesses have to register with the FMA?
No. Only specific types of businesses are required to register. According to the information provided on the FMA website, the new regulations only apply to businesses who engage in one or more of the following:
- services to safeguard private cryptographic keys, to hold, store and transfer virtual currencies on behalf of a customer (custodian wallet providers);
- exchanging of virtual currencies into fiat currencies and vice versa;
- exchanging of one or more virtual currencies between one another;
- transferring of virtual currencies;
- the provision of financial services for the issuance and selling of virtual currencies.
The FMA notes that the new requirements apply to all such providers, “both natural persons and legal entities.”
Are the new FMA requirements fair?
While many crypto exchanges and other businesses affected by the new requirements already implement some form of AML/KYC procedures, the requirements under the new AMD5 are much more strict.
Some of the new requirements include:
- More detailed financial reporting
- Clear and transparent company ownership information
- Proof that the company is not providing services to sanctioned countries
- Provide transaction and money checks
Larger crypto exchanges like Bitstamp and Kraken are reportedly already registered and in compliance with the new FMA requirements, as is brokerage firm Bitpanda.
Smaller crypto companies, however, may find the increased costs and manpower needed to satisfy the new requirements too prohibitive and may be forced to seek less restrictive regions in which to set up shop.
International businesses that provide services to EU-based traders and investors will likely find themselves required to be compliant not just on an EU-wide level, but with each specific EU country in which they offer services.
Note: Neither Micky nor any of its agents or writers are lawyers. The contents of this article does not constitute legal advice. For clarification about any information contained in this article, please contact the FMA directly.