In the past, several countries such as China and India have expressed their reservations about cryptocurrency and have declared that the industry needs to be regulated. And now, Austria has chimed in and plans to create a legal framework for the industry based on rules that currently cover the trade of gold and its derivatives. The new regulations will cover not only cryptocurrencies, but also their fundraisers, more commonly known as ICOs (Initial Coin Offering).
“We need more trust and more security…”
Following in China’s footsteps, Austria wants to regulate the circulation of digital money and their fundraisers which, typically, allow developers to finance new projects. According to Bloomberg, the Austrian government’s goal is to control the use of cryptocurrency and to prevent illegal activities such as money laundering. And for this, the country plans to use legal measures that are already in place for traditional types of assets.
Recently, Hartwig Loeger, the Austrian Finance Minister, announced: “Cryptocurrency is becoming increasingly important in the fight against money laundering and other terrorism-related activities.” This statement sounds very familiar to that of the Indian Finance Minister’s statement a few weeks ago about Bitcoin, which ended up causing its value to plummet. At the end of his statement, Loeger also added: “There needs to be more trust and more security in the industry.”
$115 Million Lost During an ICO
One of the reasons behind the Austrian government’s plans to regulate the industry is because investors recently lost nearly $115 million dollars during an ICO organized by Optioment. Now, investigations are underway to find out who was behind the heist.
According to the Finance Minister, the Austria government plans to impose the new regulations to put an end to market manipulation, insider trading, and front-running. Also, organizers of any new ICOs will have to submit a digital prospectus detailing the fundraiser to the Austrian Financial Markets Authority before launching their offering.
Loeger, among many other experts, has suggested that the European Union should also make regulations to govern the use of cryptocurrency. And, it’s possible that this could soon come into fruition.
In fact, the European Commission recently announced a meeting between two of the Central Banks biggest players with an aim to discuss the regulation of digital currency and their ICOs. The meeting is poised to take place later this week.