Rising Crypto Fraud Pushes Austrian Regulators To Demand For Stricter Regulations

News / 19.02.2021

The Austrian Financial Market Authority (FMA), an independent and autonomous body responsible for the country’s financial services industry’s supervision and regulation, has recently noticed an increase in the number of crypto-related frauds in the country.

Crypto Scams Surges

According to a recent Bloomberg report, the financial regulator stated that the number of whistle-blower reports regarding fraudulent activities in 2020 had skyrocketed.

While some of these reports also involved traditional investment assets like stocks and gold, the FMA noted that most of these fraud reports, about two-thirds, were all related to cryptocurrencies and digital currency trading products.

The financial regulator also pointed out that these scammers have been leveraging the potential of various social media platforms like Facebook, Telegram, WhatsApp, and TikTok to promote their deceitful crypto products to a wide range of unsuspecting victims.

The products are often disguised as genuine investment assets, providing misleading information and subsequently defrauding innocent and unfortunate victims of their funds.

FMA Calls For Regulation

Noticing the rapidly growing trend, the FMA is now demanding more stringent regulatory measures to be implemented to stop these crypto fraudsters’ activities.

Speaking on the issue, Klause Grubelnik, an FMA spokesman, said, “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.”

He noted that it is often tough to take legal actions against these crypto-related frauds since most of the investigations into the case are usually conducted across borders.

Crypto scams have been increasing ever since the digital currencies started receiving worldwide recognition and Austria is not new to these illicit activities.

Back in 2018, a popular crypto scheme dubbed “Options” duped more than 10,000 unfortunate victims of over 12,000 bitcoins valued at $115 million at that time, only a fraction of the asset’s current price.

That extensive fraudulent scheme had prompted the country’s authorities to call on law enforcement agencies all over Europe to search for the perpetrators.

Mandy Williams joined the crypto space in 2016, and since then she has been learning and writing about cryptocurrencies and blockchain technology.