Cryptocurrency companies operating in Austria have to apply for a license to the nation’s financial watchdog as the new Anti-Money Laundering (AML) regulations come into effect. License applicants must show to the Austrian financial watchdog that they possess sufficient capability, coherence, and solvency to run the business.
As part of their plans, 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 legal notice further reads that 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.”
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.
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Crypto exchanges and custodians are brought under EU AML rules
Published in June 2018, the AMLD5 is a pan-European anti-money laundering directive that member states will have until January 10, 2020, to implement it into their national laws. The legislation is notable because it represents the EU’s first attempt to regulate cryptocurrency activities at EU-level expressly.
Under AMLD5, crypto exchanges and custodian wallet providers will be brought within the scope of EU anti-money laundering rules for the first time. The law imposes registration and customer due to diligence requirements that force operators to disclose their traders’ identities and report suspicious activity.
Extending AML regulations to cryptocurrency activities is being considered in several countries around the world, such as Australia and the UK, and already tracks the EU’s recent push to regulate the sector.
In addition, European regulators have united in pursuing a tough regulatory approach should Libra seek authorizations to operate in the 19-country bloc. They spoke about serious implications for financial stability if authorities lost control over the phenomenon and called for a common set of rules for crypto assets, but none of them has properly taken off so far.