Prevention of Money Laundering and Terrorist Financing – first anniversary of stricter anti-money laundering regulations for Virtual Asset Service Providers: 40 Applications, 18 Registrations
Almost a year ago to the day, anti-money laundering regulations were tightened for virtual asset service providers that provide their business activities in Austria or provide them in other countries from Austria. Since then, prior to the admittance of their business activities they have been required to register with the Austrian Financial Market Authority (FMA) and are subject to the due diligence and reporting obligations for the prevention of money laundering and terrorist financing. Since the new rules entered into force, a total of 40 applications for registration have been submitted to the FMA, and in 18 cases the registration was granted.
In addition to exchange platforms (for exchanging virtual currencies against fiat currencies or vice versa) and wallet providers (providers of electronic wallets), market participants that exchange one or more virtual currencies against one another, transfer virtual currencies or provide financial services for the issuance and selling of virtual currencies. In the case of the 18 registered entities, the majority are service providers that operate electronic wallets and exchange platforms.
“The FMA pursues a zero-tolerance policy in relation to money laundering and terrorist financing. In relation to the risks associated with virtual currencies, another loophole was closed last year with the introduction of the requirement for companies active in this area to register,” remarked the FMA’s Executive Board Members Helmut Ettl and Eduard Müller. This topic will continue to remain in focus in the future: “the ongoing supervision of entities that have already been registered is also one of the FMA’s priorities for supervision in 2021,” added Helmut Ettl and Eduard Müller. The FMA observes the principle of proportionality as well as a risk-based approach to supervision in accordance with the size of the entity, the business model it provides as well as the associated risks with regard to the potential for misuse for the purposes of money laundering or terrorist financing. The objective is to appropriately tailor the intensity of supervision to the size of the undertaking and its turnover as well as the risk profile of the service and its business model, as well as potential risk factors while observing technology neutrality, such as identifying and mitigating for the exploitation of anonymity and the disguising of the provenance of funds. The obligation to register is defined in the Financial Markets Anti-Money Laundering Act (FM-GwG; Finanzmarkt-Geldwäschegesetz) and has existed since 10 January 2020. The first registration applications could already be submitted to the FMA from 01 October 2019.
Where the FMA has indications that an undertaking is conducting an activity as a service provider in relation to virtual currencies without the required registration or that it is providing an activity requiring a licence without having one, then this activity is prohibited without delay. In addition offering services in relation to virtual currencies without a registration may be punished with a fined of up to € 200,000.
Journalists may address further enquiries to:
Ms. Annemarie Bauer