Austrian regulators push for tighter crypto controls in the light of rising fraud

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Crypto scams tend to dominate investment fraud cases in Austria.

Austrian authorities are pressing for tougher crypto regulations in the wake of complex investment scams involving cryptocurrencies and digital assets.

According to the Bloomberg report on Friday, the Austrian Financial Markets Regulator has disclosed that more than 60 per cent of all reported financial fraud in the country includes crypto trading items.

The FMA says that these crypto scammers use social media sites such as Telegram and TikTok to advertise their fraudulent products to potential victims.

Commenting on the need for stricter crypto regulations to curb the menace of these fraudulent investment activities, Klaus Grubelnik, a spokesperson for the FMA remarked:

“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.”

The spike in crypto scam whistleblower reports in 2020 may be attributed to a general increase in cryptocurrency-related fraud in the onset of the coronavirus pandemic last year.

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Back in 2018, Austrian Finance Minister Hartwig Löger called for EU-wide crypto rules to tackle money laundering.

At the time, Löger’s comments came in the midst of the newly uncovered Optioment Bitcoin pyramid scheme that syphoned over 12,000 bitcoin (BTC) from the victims of the scam.

Despite the apparent rise in recorded crypto-scam investments in Austria, the country’s traditional exchanges are still at the heart of boosting the adoption of digital asset trading.

Platforms such as the Vienna Stock Exchange have listed a variety of crypto-traded products, a marked departure from the situation in the United States, where regulators are not yet allowed to trade crypto-traded funds.

Apart from controlled trading, crypto payments are also taking place in Austria with A1 Payment, one of the country’s largest mobile network operators, which allows cryptocurrency payment options back in July 2020.

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

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