Financial market supervision:

High risk of money laundering for crypto providers

(Bild: REUTERS)

The risk of crypto service providers being misused for money laundering is relatively high, according to the Financial Market Authority. One in five companies is classified in the highest risk category, according to a report on the prevention of money laundering for 2023.

In comparison, the FMA considers the risk to be significantly lower for banks and insurance companies. However, FMA Executive Director Eduard Müller believes it is unlikely that incidents like FTX could occur in Austria.

"Austria is not a financial center for soldiers of fortune," Müller told journalists on Monday evening about the FTX bankruptcy. The collapsed crypto provider - as well as another major crypto service provider - had been prohibited from obtaining a license in this country prior to its bankruptcy.

We are very clear in what we demand and also very consistent when these expectations are not met," said Müller. The regulatory requirements would also be further increased by the EU's Markets in Crypto Assets Regulation (MiCAR).

New anti-money laundering agency
The FMA's top management believes that the EU anti-money laundering agency AMLA, which is due to start work in Frankfurt next year, will strengthen the fight against money laundering in Europe and Austria. This will become a "central hub for the European supervisory authorities", explained FMA Executive Director Helmut Ettl. In future, the AMLA will directly supervise 40 "high-risk" institutions in Europe, probably one from each EU country.

In addition, the authority will also indirectly scrutinize the national supervisory authorities as a kind of "supervision of supervision". According to Ettl, it is not yet clear which Austrian companies could fall under the supervision of the AMLA.