Austria has implemented AMLD 5 into national law, meaning crypto-related businesses have to register with the Financial Market Authority. Companies that don’t comply face a fine of up to €200,000.
Like most European Countries, Austria has now also implemented the Fifth Anti-Money Laundering Directive (AMLD 5) of the European Union into national law. As a result, cryptocurrency companies operating in Austria have to apply for a license with the Austrian Financial Markets Authority (FMA).
License applicants must show to the Austrian financial watchdog that they have sufficient capability, coherence, and solvency to run the business. Crypto-related businesses that fail to register with the FMA will face a maximum fine of €200,000.
All crypto-related businesses are subject to the new rules
According to the official legal notice, exchange platforms – crypto-to-crypto, fiat-to-crypto, and crypto-to-fiat – as well as custody providers and all companies involved in trading or selling digital currencies have to register. So far, only four companies have officially registered with the FMA.
One of them is Vienna-based Kurant GmbH, which operates more than 50 Bitcoin-ATMs in Austria, Italy, and the Netherlands. Dr. Stefan Grill, CEO of Kurant GmbH, comments, “We welcome the new regulations because there have been varying interpretations in the past regarding existing or non-existing rules. This has caused strong market frictions. As the oldest operator of Bitcoin-ATMs in Austria, and as a professional business with a long-term focus, we support clear regulations to achieve full KYC and AML compliance and level the playing field in the market.”
New regulations a result of EU AML directive
The new rules come with the introduction of the EU’s AMLD 5, which all member states had to implement into national law until January 10, 2020. The legislation is the EU’s first attempt to regulate cryptocurrency activities at EU-level.
Under AMLD5, digital assets service providers are brought within the scope of EU anti-money laundering rules for the first time. The regulations include registration, licensing and customer due to diligence requirements. The new rules also force operators to disclose their traders’ identities and report suspicious activity – aiming at preventing money laundering activities. In Germany, France and Switzerland, the new rules have also led to stricter licensing requirements.
Global push for AML compliance
It’s not only the EU that is pushing for increased AML scrutiny of the crypto sector. Last year, the Financial Action Task Force (FATF) had requested all of its 200 member nations to implement the so-called “Travel Rule” for crypto businesses. Under the Travel Rule, senders and receivers of digital money will have to lay open their identities and their wallet addresses.
Similar to the traditional financial system, where each bank within the SWIFT-system has a Bank Identifier Code (BIC) and each induvial and business has an International Bank Account Number (IBAN), crypto transactions will in future also have to become traceable.
The result of this requirement will likely be a kind of SWIFT for Crypto, a global standard that forces all crypto users to confirm their identities and transactions. Crypto businesses have criticized these rules, as they don’t suit the technology, will hinder efficiency and slow down processes. Moreover, higher compliance costs may result in bankruptcies among smaller exchanges.
But all the complaining won’t change anything. The new rules will come, in fact, they already arrived, and it’s likely they are just the beginning of a global push for more supervision and regulation.