Caution: Trading platforms for crypto assets and providers of electronic wallets (wallet providers) are only subject to limited supervision

Nowadays a range of crypto assets and so-called ‘virtual currencies’ can be purchased, stored digitally and traded over the Internet. Such digital financial products and the associated services are however largely unregulated and are therefore subject to either only limited supervision or are not supervised. Even in the case of registered providers, the FMA does not have any legal means to support you in the case of you having a complain against such providers.

Due diligence obligations for the prevention of money laundering

The first step taken towards the supervision of crypto assets was to legally integrate[1] certain Virtual Asset Service Providers (VASPs), to subject them to the due diligence obligations for the prevention of money laundering.

Trading platforms for crypto assets and providers of electronic wallets (wallet providers) that provide their services in Austria, are required to register with the FMA, although such a registration is not comparable with a licence and the strict requirements and obligations associated with holding a licence.

Their supervision related only to the observance of provisions in relation to money laundering and therefore does not constitute prudential supervision, i.e. there is no supervision about the provider’s economic soundness or whether the provider observes consumer protection provisions. There is no legal basis for doing so.

More detailed information about Virtual Asset Service Provider (VASPs) and registration can be found here.

Consumer protection provisions

Under the current legal basis these providers are not obliged to have a complaints management unit and in addition in contrast to institutions that are fully supervised by the FMA (such as banks and insurance companies) are not required to observe a prescribed complaints procedure.

The FMA does not have any possibility to intervene. Any complaints should therefore be primarily addressed to the service provider itself rather than the FMA.

Licensed, registered and unregulated providers

Crypto assets and the services associated with them are often provided by companies that offer specific services under a single common brand, but where the services are in fact provided by different legally autonomous companies within the group of companies. Individual companies may therefore be licensed or registered on an individual basis, while a large proportion of the subsidiary companies frequently not being subject to any supervision.

Therefore you should always pay particular attention to which undertaking or which company is actually your contractual partner! Just because, for example, a company within the group is licensed and supervised as a investment service provider, an asset manager or an investment adviser, does not mean that another undertaking within the group that provides crypto assets or virtual asset services is also regulated and supervised.

Check precisely which company is actually your contractual partner, as well as whether and in what form the digital financial service is regulated and whether and to what extent the digital services is subject to supervision.

You can easily check at any time which companies are registered with the FMA or hold a licence granted by the FMA through the company database on the FMA’s website. There it is possible to see at a glance with financial services the undertaking is allowed to provide.

Caution: if you are unable to find a company in the company database, there is a large risk that the company is providing this financial service in an unauthorised manner, or is even acting fraudulently. You should therefore check particularly carefully whether you are dealing with a reputable company!

General terms and conditions

Before you enter into a business relationship, you should in any case read the provider’s general terms and conditions carefully, and check what rights you have as a consumer. From the general terms and conditions you are able to see with which specific company you are entering into a business relationship with, and what contract you are actually concluding.

Not covered by a deposit guarantee scheme

Caution: virtual currencies and crypto assets are not covered by a deposit guarantee scheme! Credit balances held on trading platforms or exposures towards such providers are therefore also not covered.

Frequently asked questions

Under currently applicable supervisory law, virtual asset service providers (VASPs) are not obliged to have a complaints management unit. In contrast to institutions that are fully supervised by the FMA (such as banks and insurance companies) there is no defined complaints procedure.

The providers as a rule have a customer support team. You must contact it directly. For issues relating to complaints management , the FMA does not have any legal means and is therefore unable to assist you further.

Virtual asset service providers are required to monitor their customers and their usual transactions in order to be able to detect unusual transactions. They therefore need to gather sufficient information about their customers, the origin of funds and about business relationships. This procedure is necessary to be able to detect suspicious behaviour in a timely manner, and therefore to effectively prevent money laundering.

Further information about the topic of the prevention of money laundering can be found here.

There are a wide range of reasons that delay a pay-out, or which may lead to an account being deactivated:

  • In the worst case scenario you have fallen victim to fraud. Unfortunately it is an ever more frequent occurrence that crypto wallets and trading platforms are abused by financial fraudsters for fraudulent purposes. You should therefore be particular cautious regarding transactions conducted through the wallet and about to which company you are transferring crypto assets. Check whether the company is reputable. (e.g. Watchlist-Internet (in German only), or online forums etc). It is more or less impossible to reverse a transaction!
  • In the case of registered undertakings it may furthermore be the case that transactions are unable to be settled or unable to be settled promptly or are even required to be retransferred where there is a suspected breach of anti-money laundering provisions. Certain suspicious activities are required to be passed onto the Financial Intelligence Unit (Geldwäschemeldestelle) at the Criminal Intelligence Service Austria (Bundeskriminalamt). The customer is not allowed to be informed about such information being passed on.

If you have already been the victim of fraud or an attempted fraud, we recommend to make a report promptly to the criminal police or the Public Prosecutor’s Office (Staatsanwaltschaft). The latest tricks and models for cryptofraud are summarised here.

Customers who believe that they have suffered a financial loss as a result of a provider’s behaviour or have lost out on profits, such as due to arrangements about fees and charges not being observed, may assert their claims towards the undertaking in front of regular law courts. The FMA does not have any legal means at its disposal for assisting you in asserting your rights.

Further information about Providers in relation to Virtual Currencies and about Crypto assets can be found on our website.

[1] Article 32 a of the Financial Markets – Anti-Money Laundering Act (FM-GwG; Finanzmarkt-Geldwäsche-Gesetz)