Austria is set to join a slew of countries that are looking to regulate cryptocurrencies by utilizing already existing gold trading rules and derivatives models. The Austrian government’s focus is on halting the illicit use of cryptocurrencies in money laundering. Austrian finance minister, Hartwig Loeger, acknowledged the value of cryptocurrencies while also highlighting the need for security. He stated, “Cryptocurrencies are significantly gaining importance in the fight against money laundering and terrorism financing.” He added, “We need more trust and security.”
Besides cryptocurrencies, Austria is similarly looking into specific measures for conventional financial products. Loeger detailed planned measures to regulate cryptocurrencies. One of the measures required participants in the digital currency market to identify concerned trading parties as well as disclose specific trades to the financial intelligence unit of the government if these have the value of €10,000 or $12,300 and above.
The planned regulation will also include ICOs or initial coin offerings. Rules to be implemented on ICOs are the same as current rules applied to insider trading, market manipulation, and front-running. The rules similarly demand that organizers submit to the FMA (Financial Market Authority) their “digital prospectuses”.
Austria has been seen as a cryptocurrency-friendly country compared to its next-door neighbour Germany. However, a few crypto enthusiasts surmise that Austria’s bureaucrats are acting on misplaced worry related to cryptocurrencies being used to launder money. Crypto experts believe that there is a long-standing tradition among government officers to blame new technologies for unproven or non-existent offenses. Some go on to claim that Austria’s cryptocurrency plans are simply their way to cover up their own professional shortcomings.
The announcement of the impending cryptocurrency regulations follow after an alleged cryptocurrency scam caused as much as $115 million losses to investors. Besides Austria, the European Union is similarly looking into implementing regulation on digital currencies via an upcoming meeting that will be attended by market supervision figures as well as top central bank players.