Austrian regulators call for stricter crypto regulations amid rising fraud

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Austrian regulators are calling for stricter crypto laws amid a spate of elaborate investment scams involving cryptocurrency and digital assets.

According to a Bloomberg report of Friday, Austria’s Financial Market Authority has revealed that more than 60% of all reported financial fraud in the country involve crypto trading products.

The FMA says these crypto scammers are using social media platforms like Telegram and TikTok to advertise their fraudulent offerings to would-be 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 surge in crypto scam whistle-blower reports in 2020 could be linked to a general increase in cryptocurrency-related fraud amid the onset of the coronavirus pandemic last year.

Back in 2018, Austria’s finance minister Hartwig Löger called for pan-European Union crypto regulations to combat money laundering.

At the time, Löger’s comments came amid the recently discovered Optioment Bitcoin pyramid scheme that siphoned over 12,000 Bitcoin (BTC) from the victims of the scam.

Despite the apparent increase in reported crypto scam investments in Austria, traditional exchanges in the country are still at the heart of boosting the adoption of digital asset trading.

Platforms like the Vienna Stock Exchange have listed a variety of crypto exchange-traded products, a marked departure from the situation in the United States, where regulators are yet to allow the trading of crypto exchange-traded funds.

Apart from regulated trading, crypto payments are also making a splash in Austria with A1 Payment, one of the country’s largest mobile network operators, enabling a cryptocurrency payment option 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 technologies.