Austrian Regulators Bemoan Increased Rate of Fraud Involving Crypto, Calls For Stricter Regulations

Austrian Financial Market Authority (FMA) has seen an increased number of whistleblower reports of potential fraud for the 2020 financial year. According to a Bloomberg report on the matter, the FMA is particularly concerned with cryptocurrencies, taking the larger percentage of the reported fraud cases.

The Financial Market Authority noted that about two-thirds of the investment fraud reports were related to crypto- and digital currencies trading products, while the rest was, among others, related to stocks and gold. Fraud in the cryptospace is not uncommon with the bad actors shilling such suspicious projects taking to social media in a bid to drive publicity. Owing to these occurrences, the FMA is calling for improved regulations. The regulator’s spokesman Klaus Grubelnik said on Friday,

“We see a great need for stricter regulation. Fake offerings for stocks and gold have been around forever and these scams are now shifting to digital assets because of the hype.”

Grubelnik also bemoaned the difficulty in prosecuting such crypto-related fraud cases as the investigations have to be conducted in collaborations with other country’s authorities.

Austria Is Adjusting To Trends In The Cryptospace To Let Innovations Thrive

The European nation is one of the most crypto-friendly countries in the region and around the world. Austria has been proactive in allowing crypto innovations to thrive, particularly with the Vienna Stock Exchange listing a variety of crypto exchange-traded products.

Exchange-traded products are digital investments or securities that are traded on the stock exchange. In this case, the underlying asset is cryptocurrencies ranging from Bitcoin (BTC), Ethereum (ETH), and other unique altcoins.

Crypto-backed exchange-traded products are relatively not as dreadful as they are subjected to the regulations of the exchange wherein they are traded. This gives investors more confidence to wade into the world of crypto investments.

Additionally, homegrown firms are also backing and integrating cryptocurrency innovations. One of the country’s largest mobile network operators, A1 Telekom Austria Group enabled cryptocurrency payments for its services, in a first of its kind move.

On the blockchain adoption front, the Iota Foundation partnered with the Vienna University of Technology back in November 2020 to explore research activities in distributed ledger technologies.

Blockchain technology and cryptocurrencies are making waves in our world today, and despite the embrace that world governments are extending to the emerging technology, bad actors are liable to take advantage of any loopholes to perpetrate fraud. Strict and encompassing regulation as being proposed by the Austrian FMA may be the missing link to usher in mainstream adoption and participation in the cryptospace.