Legal Aspects of Crypto Regulation in Austria

This blog post provides a brief overview of the Austrian crypto regulatory landscape that may be useful to entrepreneurs already in the market or planning to open a crypto company in Austria.

Today, financial officials from different countries are actively discussing how exactly cryptoassets will be handled in their jurisdictions. One of the European leaders in the field of digital currencies, Austria, is considering the regulatory framework for trading gold and derivatives as the basis for the regulation of digital assets.

It is also concerned about the issue of money laundering and financing of illegal activities, as well as the issue of holding an ICO. Initial coin offerings must be conducted in accordance with approved prospectuses and approved by the Austrian regulator. It is expected that drawing up a prospectus and passing it through the sieve of rules will improve investor protection.

So far, the Austrian authorities have not delved into specifics, as, for example, Germany, which decided to analyze the essence of each ICO. But the trend is globally noticeable: the EU is looking for an opportunity to provide the new economy with an appropriate regulatory framework.

1. Today, there is no specific legislation governing cryptocurrency-related business transactions in Austria. Certain types of crypto business can only be carried out after obtaining a financial services license in Austria. Therefore, financial regulators opened a fintech-related advisory point to help with new business models that require authorization under Austrian financial services regulation. Establishing a crypto exchange in Austria will require authorization. We can provide a comprehensive consultation on registering a cryptocurrency exchange with FMA.
2. For violations of applicable financial services and securities laws, the regulator can apply a range of sanctions. That is why, if you already provide financial services in the European market, then it is worth ordering a legal due diligence of a fintech company in Austria in order to protect it from unforeseen fines.
3. There is no special court to resolve crypto disputes in Austria. Typically, a commercial dispute (eg, a dispute between entrepreneurs) should be brought to commercial courts, and a civil law dispute to civil courts. Reach out to us to find out the best solution in your specific situation.
4. There are no general restrictions on cryptocurrency ownership but its use in commercial transactions and the exchange of cryptocurrency for local fiat currency may require a banking and payment services license. If you need to get a payment service license in Austria, we can help.
5. Security tokens are often priced in a similar way to securities (bonds or stocks) and are often regarded as transferable securities. This is a fundamentally important point for trading platforms, as they will need to be authorized as stock exchanges or regulated trading platforms. Currently, there are no specific rules governing STOs but the situation may change quite soon. It is worth ordering legal advice on the set up of a crypto exchange in Austria in order not to miss important regulative novelties.
6. Issuance and investment in Stablecoins are governed by general securities laws.  Cryptoassets distributed through Airdrops are subject to the general laws on securities, commodities and trade.

If you want to start an investment project in Austria, we are happy to provide assistance with the legal component of the business.