Austrian regulator reminds that new rules for virtual currency services providers come into effect

Maria Nikolova

Providers of certain financial services related to crypto-assets are required to register with the competent supervisory authority – for Austria this is the Financial Market Authority.

Austria’s Financial Market Authority (FMA) has issued a notice regarding the new requirements for businesses that provide services related to virtual currencies.

From January 10, 2020 digital currencies are included in the European regime for the prevention of money laundering and terrorist financing. Providers of certain financial services of such crypto-assets are required to register with the competent supervisory authority – for Austria this is the FMA. The following services are subject to the requirement to register: the issuance and selling of virtual currencies as well as transferring them, trading and exchange platforms for them (irrespective of where virtual currencies are to be exchanged between one another or for legal tender payment instruments or vice versa) as well as providers of custodian wallets.

Such providers are required with effect from January 10, 2020 to comply with the due diligence and reporting obligations for the prevention of money laundering and terrorist financing. Unregistered providers may no longer offer their service in Austria.

Registered providers must notify the FMA of every change in the registered office of the company, the name of the company, its directors, services and any other additional significant information. Where the FMA determines that the provider is not complying with the requirements set out in the Financial Markets Anti-Money Laundering Act or that the personal suitability of the provider (its CEO) or its beneficial owner is not satisfied, then the regulator may prohibit an intended registration or make revoke an existing registration. A fine of up to € 200,000 is prescribed in the event that a provider fails to register.

In the case of business relationships and transactions of the provider to high-risk third countries, enhanced customer due diligence must also be applied for the prevention of money laundering. The FMA may prescribe risk mitigating measures for such business relationships and transactions.

The new rules form part of the 5th Anti Money Laundering Directive (Directive (EU) 2018/843), which has been transposed in Austria by the Financial Markets Anti Money Laundering Act.

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