The European Union’s Markets in Crypto-assets Regulation[1] (MiCAR) becomes fully applicable from today. The Austrian Financial Market Authority (FMA), in its capacity as competent authority assumes a key role in the comprehensive regulation and supervision of the Austrian crypto-market. The new legal framework marks a further step in the right direction towards greater integrity, transparency and reliability in a area of the financial market that has grown strongly to date, but which in many ways has not been transparent.
The objective of MiCAR is to migrate crypto-assets and their issuers and service providers into a comprehensively regulated environment. By doing so, both professional market participants as well as consumers should profit from a greater degree of security. “Our expectation of new supervised entities is that they adopt a consistent ‘compliance-first’ stance”, remarked the FMA’s Executive Directors Helmut Ettl and Eduard Müller. “This means that abiding by laws, responsible conduct of business, and protection of customers at all times are paramount. The Wild West era in the crypto-markets is over!”
FMA Supervisory Priority in 2025: clear standards and transparent procedures
From 2025, the FMA will particularly focus on the licensing procedures for crypto-asset service providers (CASPs). Providers that wish to provide services like custody, exchanging or advice in relation to crypto-assets, will now be required to meet strict criteria. These criteria include having sufficient own funds, a robust risk management, adequate internal control systems as well as transparent information about their business models. In this context, the FMA with increasing ensure that the Fit & Proper requirements for owners, executive directors and other key function holders are implemented in a consistent manner.
Regulation of Asset-Referenced Tokens (ARTs) and E-Money-Tokens (EMTs)
MiCAR contains specific rules for asset-referenced tokens (ARTs) and e-money-tokens (EMTs) as well as their issuers. The performance of such crypto-assets is tied to other assets (e.g. commodities, official currencies) and are popularly known as “stablecoins”. In the future they will be subject to clear standards in terms of stability and consumer protection. Requirements under supervisory law regarding placed upon issuers, such as capital base, redemption rights, as well as strict information requirements (white papers) are material for both EMTs, which imitate classical payment instruments, and ARTs. The FMA expects issuers to consistently observe these rules.
White papers for other crypto-assets: comprehensible and reliable information for everyone
The introduction of white papers as a key information instrument is a further requirement under MiCAR. Anyone providing crypto-assets that do not fall under the categories of ARTs or EMTs, is obliged to submit an easy to understand white paper. This is expected to set out the material features of the crypto-asset, its technical bases, underlying economic concept, risk factors as well as the rights and obligations for investors. The FMA expects this information to be set out is a way that is fair, clear and not misleading.
Consistent action against unauthorised providers, crypto-fraud and money laundering
Investment fraud in relation to crypto-assets is an increasing problem. The new Regulation not only increases the requirements for serious market participants, but also strengthens the sanctioning of unauthorised providers and improves transparency for investors. Persons or undertakings providing crypto-asset services without the necessary approval must reckon with hard-hitting supervisory measures and sanctions. The MiCAR regime will ensure, inter alia by means of ongoing exchanges with Austrian and foreign supervisory authorities, that crypto-fraud, dubious business practices as well as money laundering and terrorist financing will continue to be prevented by means of high supervisory standards.
The Austrian crypto-market: greater security for consumers
As a result of MiCAR’s entry into force and the FMA’s enhanced role as supervisory authority, consumers in the Austrian crypto-market will be able to enjoy greater security, transparency and legal certainty in the future. The FMA considers itself to be a reliable partner for all market participants interested in a fair, orderly and customer-oriented business model. “We are convinced that compliance with all rules set out under supervisory law is a key criterion for success for providers,” added Ettl and Müller. “Compliance is more than a sideshow, and is the basis for sustainable confidence and long-term market stability.”
Additional requirements arising from DORA: increased technical and operational resilience
In parallel to MiCAR, the Digital Operational Resilience Act[2] (DORA) will also apply throughout the EU from 17 January 2025. This Regulation focuses on strengthening IT security and operational resilience of financial market participants significantly. For CASPs, this will mean that they will also be required to provide comprehensive technical security and crisis management plans in addition to the new supervisory rules under MiCAR. The FMA’s expects undertakings to continuously monitor and secure their IT systems, to conduct regular stress tests and to have clear contingency plans in plan in order to remain able to operate in the event of cyber attacks or system outages. Parallel application of MiCAR and DORA will not only increase transparency and confidence in the Austrian crypto-market, but will also make it technologically more secure.
Further information
Additional more detailed information can be found on the FMA website. Consumers can consult the FMA Company Database to find out whether a provider is licensed.
The FMA’s “Let’s talk about money” publication series has already addressed the topic of Trading Platforms.
Journalists may address further enquiries to:
Boris Gröndahl (FMA Media Spokesperson)
Telephone: +43 (1) 249 59-6010
Mobile: +43 676 8824 9995
E-Mail: [email protected]
[1] Regulation (EU) 2023/1114, transposed in Austria by the MiCA Regulation Enforcement Act.
[2] Regulation (EU) 2022/2554