New rules in force

“The Wild West era on the crypto markets is over”

The EU's regulatory corset continues to tighten for providers of services and trading in cryptocurrencies. The Markets in Crypto Assets Regulation (MiCAR) will become fully applicable on Monday. Among other things, the regulation is intended to increase the protection of investors and simplify the fight against money laundering.

In Austria, the Financial Market Authority (FMA) will take over supervision of the crypto market. "The Wild West era on the crypto markets is over," announced FMA Executive Board members Helmut Ettl and Eduard Müller in a press release. The board members expect the new supervisors to "prioritize compliance with the law, responsible business conduct and customer protection at all times".

As a result, licensing procedures for crypto providers will become stricter, and providers of services such as custody, exchange or advice relating to cryptocurrencies must now provide sufficient capital, robust risk management, appropriate internal control systems and transparent information on their business model.

Owners, managers and other high-ranking individuals must also meet the fit and proper requirements, which assess their qualifications and honesty.

Sanctions may be imposed if the requirements are not met
MiCAR includes special rules for asset-referenced tokens (ART) and e-money tokens (EMT). These are crypto assets whose performance is linked to other assets such as commodities or official currencies and are also referred to as "stablecoins". In future, providers will have to comply with regulatory requirements on capitalization, redemption rights and special information obligations.

Providers of other crypto assets that do not fall under the rules for ART and EMT will also have to provide more comprehensive information (white papers) in future. According to the FMA, the characteristics of the crypto asset, its technical basis, the economic concept, risk factors as well as rights and obligations for investors must be explained "honestly, clearly and not misleadingly".

Providers who do not meet these requirements must expect "strict supervisory measures and sanctions", the regulator continues. For consumers, the regulation primarily means "more security, transparency and legal clarity".

DORA also strengthens IT security
In addition to MiCAR, the Digital Operational Resilience Act (DORA) will also be applied from January 17. This primarily ensures increased IT security and operational resilience for financial market participants. Providers of cryptocurrencies must therefore also submit technical security and crisis management concepts.

The FMA requires the companies concerned to "seamlessly monitor and secure their IT systems, conduct regular stress tests and have clear emergency plans in place to ensure that they remain capable of acting in the event of cyber attacks or system failures".