Austrian securities regulator calls for tighter contols over ICOs

July 02, 2018
Chris Wheal

Board members of Austria’s chief market regulator have proposed tighter regulations on cryptocurrencies – particularly on the oversight of initial coin offerings (ICOs).

Austrian regulators suggest new rules: Shutterstock

Klaus Kumpfmuller and Helmut Ettl, directors of the Financial Market Authority (FMA), suggested in an interview with Austrian paper Die Presse a number of measures for ICOs to help combat fraudulent activity.

Treat ICOs like securities

One of their main suggestions was to introduce measures to treat crypto token distributors like securities in the future, including a “threshold-dependent” prospectus requirement for ICOs, similar to the regulations governing capital raisings in equities markets.

Ettl was scornful that Austrian regulations which require institutions engaged in the activity of selling and purchasing foreign exchange to have a mini-bank licence, has no such equivalent rule for trading crytocurrencies.

In 2017, the FMA submitted to the public prosecutor around 30 cases in which it suspected legal violations regarding the use of cryptocurrencies and the launch of ICOs.

Cryptos regulated under commodities rules

In February, Austrian regulators said they were considering using existing rules that govern the trading of commodities as a model for new cryptocurrency regulations.

Like many global efforts to bring greater scrutiny to the cryptocurrency market, Austria has outlined measures that would require exchanges to more closely monitor the activities of their customers – including an obligation to disclose trades of €10,000 or above.

“Cryptocurrencies are significantly gaining importance in the fight against money laundering and terrorism financing: we need more trust and security,” said finance minister Hartwig Loger.

The finance ministry and the FMA have not enjoyed the most genial of relationships in recent months, according to Die Presse, which says Loger is calling for “more regulatory responsibility at the ministerial level” and wants to strip the regulator of some of its authority.

Post written by Chris Wheal
Chris Wheal is editor of OpenLedger's news and features service. An award-wining business journalists himself, he runs a team of freelance journalists from across the UK and north America.

Related News

OL DEX is closing all activities April 25, 2020
USDT (ERC-20) Gateway Enabled April 17, 2020