Austria crypto regulators have announced that crypto firms before they begin operations are to apply for a license from the nation’s financial watchdog as the new Anti-Money Laundering (AML) regulations came into effect.
Cryptoassets however, do not fall under this regulation as they remain subject to European Securities and Markets Authority (ESMA) current restriction. Austria crypto regulators has also advised investors to always verify the company’s identity (identity details, country of establishment, etc.) Before investing and never to trust a company if it cannot be clearly identified.
In other to supervise and ensure compliance with rules and regulations in the financial market, the Financial Markets Authority (FMA) of Austria will impose a maximum fine of €200,000 on crypto asset-related businesses that fail to register with the country’s regulator.
This is in line with the implementation of the Fifth Money Laundering Directive (AMD 5). It provides enough explanation on crypto assets and describes it as “financial instruments.” Financial instruments goes beyond cryptocurrencies to cover many related-assets, including security tokens.
FMA, the Austria crypto regulators has been stern in its warning towards investors explaining the potential risks associated with investing in Bitcoin and other cryptocurrencies. Many crypto companies in Austria had to fold up as Europe is gradually tightening the rule for the crypto space.
Outside Austria, other European countries are also being stern as regards crypto regulations in their country. Czech Republic last year, were also planning to impose a harsh set of regulations on cryptocurrency firms, exceding the requirement specified by the European Union (EU).
A local newspaper in Czech Republic reported that Czech authorities are planning to impose stricter regulations including a hefty fine of around $560,400 on crypto companies that fail to register their business with the national Trade Licensing Office.
However, it was not said the precise time for the introduction of the new set of regulatory frameworks.
The European Union’s 5th Anti-Money Laundering commands that EU member states begin crypto regulation from Jan. 10. Crypto exchanges and custodial wallet providers are also covered by the same regulatory requirements as banks and other financial institutions.
The directive amends the 4th Anti-Money Laundering Directive and extends the EU’s anti-money laundering and counter-terrorism financial rules to virtual currencies. The amendment also proposes that member states create central databases comprised of crypto users’ identities and wallet addresses and authorize national FIUs to access the information stored in them.