After crypto regulation: Austrian FMA assesses AML measures introduced

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Austrian FMA assesses introduced AML measures

Almost a year ago, the Austrian Financial Market Authority (FMA) introduced stricter crypto regulations. Now the financial authority took stock.

One year ago, the Austrian Financial Market Authority (FMA) passed its crypto resolution. At that time, the stock exchange supervisory authority introduced stricter regulations for service providers of virtual currencies. Since then, crypto providers with business activities in or out of Austria have had to register with the Cryptosoft Financial Market Authority. The aim of the new regulations: to combat money laundering and terrorist financing. On 7 January, the financial authority drew a first conclusion in a press release.

According to the FMA, since the regulation came into force, 40 providers applied to the stock exchange supervisory authority for a licence. 18 companies were granted the request. These are mainly companies that operate “electronic purses and exchange platforms”. FMA board members Helmut Ettl and Eduard Müller said on the one-year anniversary of the new legislation:

The FMA has a clear zero-tolerance approach to money laundering and terrorist financing. Aware of the risks associated with virtual currencies, we therefore closed another loophole last year and introduced the registration requirement here for companies operating in this area.

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The licensing is based on certain criteria. These include the size of the company, the business model offered with the associated risks of abuse through money laundering and terrorist financing, as well as the proportionality principle and the existence of a risk-based supervisory approach.

The goal is to appropriately adapt the size of the company and its business volume as well as the risk content of the service and the business model to the supervisory intensity of the financial authority. In addition, while maintaining technology neutrality, potential risk factors are also to be identified and mitigated. These include the exploitation of anonymity and the concealment of the origin of funds.

Financial authorities fail in the fight against money laundering

The FinCEN files that became public in September last year clearly show that banks and financial authorities such as the FMA worldwide definitely have room for improvement in the fight against money laundering. The leak from the US Treasury Department concerns documents that prove that large financial institutions such as JPMorgan, HSBC, Barclays or Deutsche Bank moved large sums of money from criminals or other controversial persons, although they were actually on sanction lists. In total, almost two trillion US dollars are said to have been transferred in this way. This corresponds to more than three times the market capitalisation of Bitcoin.