Regulation is the buzzword lately in the cryptocurrency space. Governments around the world are getting into the picture. South Korea’s authorities are taking action. Japan has reacted to exchange hacks with official ultimatums. And now we have Austria wanting to get strict with cryptocurrencies and ICOs.
Austria’s Stricter Approach to Cryptocurrency Regulations
The FMA (Austrian Financial Market Authority), has come out with what they want to see happening with digital assets in their country. The FMA ’s board of directors, Klaus Kumpfmuller and Helmut Ettl, have offered strict proposals concerning both cryptocurrency regulation in Austria and ICOs (initial coin offerings) in Austria.
Kumpfmuller said the FMA seeks a “threshold-dependent” prospectus plan to regulate ICOs. The plan is a lot like what is currently required for traditional securities.
According to the FMA, they think that a 2 million Euro threshold “would be reasonable.”
Just Like Traditional Securities
As a clarification, Kumpfmuller maintained that cryptocurrency “will be treated like securities in the future.”
Elaborating on the topic, Ettle drew a comparison between their proposed cryptocurrency regulations to existing restrictions on established financial institutions. “For the purchase and sale of foreign currency you need a mini-bank license,” stated Ettle. So, his view is that cryptocurrency coins are a type of foreign currency and should be subject to the same rules and regulations that banks must follow in trading and handling foreign fiat currency.
No Real Current Laws For Crypto Coin Trading
To date, there is no comparable regulation or regulations for trading crypto coins in the country of Austria. However, last year the FMA has been busy. They believed that they uncovered numerous violations of Austrian law all connected to ICOs and cryptocurrency.
They described the “infractions” is 30 statements that were given from the FMA to the public prosecutor’s office. So far, trading cryptocurrencies have no such analogous regulation under Austrian law. Last year, the FMA submitted around 30 statements regarding suspected legal violations in connection with cryptocurrencies and ICOs to the public prosecutor’s office.
Cracking Down on Money Laundering
The Austrian FMA, in addition to demanding stricter ICO and cryptocurrency regulations, also made mention of money laundering. They want regulations with “more teeth” directed toward the criminals that launder money.
Up to this point, Austria has not paid much official attention to money laundering. The FMA claims that there have been only “superficial” legal regulations concerning this illicit practice. Expanded oversight directed toward money laundering activities by them, they argued, should be seen as a positive.
Some Resistance from Austria’s Finance Minister
On the other hand, Austria’s Finance Minister, Hartwig Löger, seems to want to reduce the scope of authority of the FMA. There has been regular infighting. Disagreements between the FMA and the OePR (Austrian auditing authority) have, apparently, not set well with Löger.
He has, in so many words, accused the FMA of not doing their job competently. Löger says what is needed is more “regulatory responsibility at the ministerial level”, which the FMA should then “reasonably execute.”
Despite these bouts of political bickering, there is agreement that a more hard-line regulatory approach is needed. There is also at least an appearance of working together and of having common goals.
A Bit of Consensus
Early this year, Löger said there needed to enacted stricter cryptocurrency regulation in Austria. His proposal was rapidly accepted by both Kumpfmuller and Ettl. Both gentlemen quickly offered themselves as part of a staffing solution for the proposed “FinTech Regulatory Council.”
It is worth noting that the European Union already has some ICO and cryptocurrency regulations in place. Austrian financial authorities, however, are set on establishing their own digital asset rules based upon successful regulation efforts by officials in other countries around the globe.