Austria’s finance ministry is looking at the trading rules for gold and derivatives as inspiration for drawing up regulations on cryptocurrencies for the nation and for the European Union.
The goal is to prevent Bitcoin and similar virtual currencies from facilitating money laundering — a crime that’s no stranger to the precious metals business — and to bring trading platforms under the kind of oversight that already exists for financial instruments, Finance Minister Hartwig Loeger said in a statement on Friday. Loeger is meeting his Portugese counterpart Mario Centeno in Lisbon today and will raise the issue, he said.
“Cryptocurrencies are significantly gaining importance in the fight against money laundering and terrorism financing,” Loeger said in the statement. “That’s an important aspect for the changes we support. We need more trust and more security.”
Austria is the latest country pledging to tighten rules on a form of virtual money that’s created without central banks, traded with little supervision and courses through the world with an anonymity that can let its owners evade taxes or take part in crimes. Legislation is needed both in Austria and the European Union, Loeger said.
Participants in the Bitcoin market should be required to identify their counterparties and to report trades exceeding 10,000 euros ($12,300) to the financial intelligence unit, similar to companies that handle large amounts of cash, gold or jewelry, Loeger said. Trading platforms should be supervised by the financial watchdog FMA, he added.
Initial coin offerings should be required to be based on “digital prospectuses” that need approval by the FMA, Loeger said. For those deals, as for share or bond offerings, rules that criminalize market manipulation, insider trading or front running must be applied, he said.
Austrian participants in the emerging industry include HydroMiner GmbH, which is seeking to piggyback on the country’s vast hydropower facilities to mine cryptocurrencies, as well as the Bitpanda trading platform, which is eyeing an office in London. Austrian authorities say scams have targeted the country, and they are investigating a Bitcoin firm that seems to have lost as many as 12,000 Bitcoins.