Momentarily no special legislation is applied to crypto assets, transactions with them, or blockchain in Austria. Furthermore, in the opinion of the Austrian government, such legislation is not needed at all. The reasoning behind this attitude is the fact that the overregulated crypto industry in the EU demonstrates slower development in technologies. Resultingly, European companies implementing digital technologies are not seen among the top largest ones in the world. Yet, the specialty of the Austrian approach is the separation of cryptocurrencies and blockchain technology. They strongly believe that digital assets should be regulated.
In this article we will discuss some crucial aspects to know before opening a crypto currency company in Austria.
The approach of the Austrian Financial Market Authority (FMA) stays rather neutral towards the regulation of crypto companies. It means that their activities and products are supervised under the same laws as other regular financial services.
Since digital currencies are not considered financial instruments, they are not subject to the regulator’s control. Still, licensing requirements can be applied to financial services like any use of tokens, trading platforms, or electronic money.
So, it is mandatory to obtain a crypto license to provide such services in Austria. Other conditions to follow are:
- AML / CFT
- Requirements for prospectuses
- Requirements for customer privacy.
Important to remember – recently the 5th EU Directive has been transposed into Austrian law. This resulted in changes in AML and KYC due diligence obligation for e-wallet operations and cryptocurrencies exchange providers.
Crypto license in Austria
Providers of banking and payment services in Austria must obtain licenses for using cryptocurrencies in commercial and exchange operations. Starting this year, it will be mandatory to follow AML and KYC obligations for service providers involved in exchanging virtual currency into national currency.
When it comes to crypto currencies that are commodities, FMA does not supervise them. This is a prerogative of Austrian trade authorities.
ICO in Austria
The regime of regulation in Austria attracts many companies considering an ICO. More specifically, in Austria general securities and commodity legal framework is applied to ICOs. The regulators do not provide any special separate rules. However, some tokenized offerings will go through an examination. During the assessment, multiple valuation models can be used. It always depends on the structure of the proposed instruments: technical, functional, economic.
Within the framework of European securities legislation (like MiFID2) coins and tokens issued in an ICO can be considered transferable securities.
Because of ICOs being viewed as highly speculative and risky for financial transactions, FMA is about to take further measures to protect investors more effectively.
If your questions were not fully answered by this article, we are here to meet you at a personal consultation in COREDO. Our experts are prepared to provide you with a detailed description of the regulation of cryptocurrencies in Austria and walk you through every step of opening your own crypto company.