Due to increasing cases of fraud – Austria calls for stricter crypto regulation
The financial regulator of the Alpine republic sees the current hype around cryptocurrencies as a great danger for investors.
The Austrian Financial Market Authority (FMA) has found that investment fraud is now largely carried out with cryptocurrencies, prompting the authority to call for „stricter regulation“ of them.
As revealed in a report by Bloomberg yesterday (Friday), more than 60% of investment fraud cases reported to the FMA by „whistleblowers“ are related to crypto assets.
In the accompanying press release, the authority confirms that mainly social networks such as Facebook, WhatsApp, Telegram and TikTok are used as Bitcoin Loophole breeding grounds to lure investors into fraudulent projects.
Klaus Grubelnik, a spokesman for the FMA, therefore emphasises that a decisive reaction must follow, especially due to the current popularity of cryptocurrencies:
„We see a clear need for stricter regulation. Fake offers for shares and gold have always existed, but now the fraudsters are increasingly shifting to digital currencies because of the current hype.“
The increase in fraudulent crypto schemes in 2020 noted by the Austrian financial regulator goes hand in hand with a general increase in crypto fraud since the beginning of the Corona crisis.
However, the fact that the Alpine Republic would like to see stricter treatment of cryptocurrencies is not new
For example, Austria’s Finance Minister Hartwig Löger had already called for a common European crypto regulation in 2018 to combat its possible role in money laundering.
At the time of the demands at the time, a crypto snowball scheme that had defrauded its victims of more than 12,000 Bitcoin (BTC) was in the headlines, which makes the political backlash all the more understandable.
So although there are more and more illegitimate crypto projects in Austria, many reputable companies are making efforts to increase adoption of the asset class.
The Vienna Stock Exchange, for example, has already included several crypto-financial products in its listing, which means that the „conservative“ country is even far more progressive in terms of cryptocurrencies than the USA, which has not yet allowed a Bitcoin ETF.
Crypto payments are also slowly establishing themselves in Austria, with the major mobile operator A1 already allowing payments in the form of cryptocurrencies via its proprietary payment network since July 2020.
Meanwhile, the University of Vienna teamed up with the IOTA Foundation in November 2020 to further explore the use of blockchain technology.