Digital currencies have been recently included in the AML/CFT system of the European Union. For those entrepreneurs planning to register a crypto business in Austria or already having one, this means that crypto companies are now operating under the supervision of the Financial Market Authority (FMA).
It's all about the Fifth EU Anti-Money Laundering Directive (5MLD), transposed into Austrian law (FM-GwG). In general, what previously applied only to banks and providers of various financial services now applies to crypto companies as well.
In particular, in order to become a provider of crypto wallets, establish a crypto exchange in Austria, create a trading platform, launch token emission or open crypto ATMs, you will now have to reckon with FM-GwG and identify customers, as well as verify the origin of their funds. In addition, to start a crypto business in Austria, you will have to register a company with the FMA.
On the new AML requirements
If a person intends to become a financial services provider in Austria or work in the crypto industry, they will have to comply with due diligence to combat money laundering and financing illegal activities.
The provisions apply to all activities related to virtual currencies:
- Cryptoassets issue and operations with them;
- Crypto wallets;
- Crypto exchanges and trading platforms;
- P2P providers.
More on Compliance
When setting up a company for crypto activity in Austria, it must be remembered that the basis is formed by the rules regarding AML and KYC procedures. Thus, when doing business, you will have to constantly check information about the origin of customer funds that the company processes. That is, the identity of the client and the ultimate beneficiary must always be defined. Moreover, information that verifies the authenticity of information about transactions must be obtained from a competent source.
As a result, it turns out that if, for example, the goal is to establish a cryptocurrency exchange in Austria, you will have to make sure that each client submits documents confirming the origin of their funds.
In turn, the crypto platform must register this data in a specially created system and verify its authenticity. Suspicious transactions must be reported to the regulator immediately.
It should be understood that regardless of whether the registration of a crypto company in Austria was carried out correctly, such a service provider company is under the supervision of the regulator, which constantly monitors the compliance with FM-GwG and does not carry out other supervisory activities, especially under other laws and regulations.
Enforcement and consequences of refusal to register a company with FMA
In order to be able to offer the corresponding services after the establishment of a crypto company in Austria, it is imperative to register the company with the FMA. In the event that the applicant fulfilled the conditions, and also paid the fee, it will be included in the FMA database.
If the registration was not carried out on time (before the company provided the first service), the regulator has the right to impose a ban on the further activities of the company, as well as impose a very substantial fine – up to 200,000 euros.
Forecasts and prospects
Basically, registering a crypto company with the FMA is another mandatory item if you intend to establish a crypto business in Austria. The regulation is likely to thin the ranks of those wishing to register a company for crypto activities in Austria to some extent, since not everyone will be able to bear the financial costs associated with compliance with the established norms.
In addition, given that companies that now offer services in the field of cryptocurrencies in the Austrian market will have to follow the obligations that previously applied only to banks and other financial service providers, it is very likely that they will experience certain difficulties and will be forced to adapt to new conditions or cease to exist.
However, at the same time, the complication of the new rules of doing business will lead to an increase in the security of the crypto business, its transparency and, accordingly, the trust on the part of customers.
Crypto company registration with the FMA must be done in a timely manner so that the company has room for maneuvers and is safe from problems with regulators, fines, etc. In order to fulfill all the conditions for starting a crypto business in Austria on time, it would be advisable to enlist reliable professional assistance.
Please note that if you have any questions that are related to the topic of this article, you can analyze them and find solutions together with the experts of IQ Decision UK during a consultation on cryptoactivity in Austria.
In addition, we remind you that the specialists of our company provide advice at all stages of registration of a crypto company in Austria, the UK, the USA, Singapore and other countries and provide other related services.
To sign up for a consultation on crypto business in Austria, or to find out more detailed information about the services of our company, please contact us right now at the contacts below.