Austrian financial supervisory authority (FMA) today warned investors of the activities of FX Crypto Club, a Marshall Islands-based broker that has been offering financial products in the country without authorization.
Echoing previous warnings, the independent financial regulator noted that FX Crypto Club offers customers CFDs that allegedly give them exposure to cryptocurrency instruments.
Crypto firms operating in Austria have to apply for a license to the nation’s financial watchdog as the new Anti-Money Laundering (AML) regulations came into effect. Although derivatives referencing cryptoassets would not fall under this regulation, they remain subject to ESMA’s current restriction and any future proposals by the FMA regarding the sale of these instruments to retail investors.
The Austrian Financial Market Authority (FMA) pointed out that the company is based out of Majuro, the Marshall Islands, while soliciting its clients using a website operated by its parent CapCorp Ltd.
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The watchdog has also advised the public to always verify the company’s identity (identity details, country of establishment, etc.) and never to trust a company if it cannot be clearly identified.
In its capacity to supervise the financial market and enforcing compliance with rules and regulations, the Financial Markets Authority (FMA) of Austria will impose a maximum fine of €200,000 on cryptoasset-related businesses that fail to register with the country’s regulator.
The rules come within the implementation of the Fifth Money Laundering Directive (AMD 5), which provides a broad definition of crypto assets and qualifying it as “financial instruments.” Such a broad definition of financial instruments goes beyond cryptocurrencies to cover many related-assets, including security tokens.
The Austrian watchdog has been adamant in its warnings toward investors, elaborating on the potential risks associated with investing in Bitcoin and other cryptocurrencies. Some crypto providers had no choice but to cease operations as Europe is gradually tightening the rules for the crypto space.