Austria

**Report: Retail Cryptocurrency Trading Status in Austria**

**Date:** April 12, 2025

**Topic:** Retail_Trading_Status

**Description:** This section assesses the legality and regulatory environment for individual citizens and residents in Austria concerning the buying, selling, and holding of cryptocurrencies. It details relevant regulations, including Know Your Customer (KYC) and Anti-Money Laundering (AML) requirements for platforms, and official warnings.

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**1. Current Status:** `Allowed-Regulated`

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**2. Narrative Explanation:**

Retail cryptocurrency trading, including buying, selling, and holding digital assets like Bitcoin, is **legal** for individuals in Austria. Cryptocurrencies are not considered legal tender but are recognized as digital representations of value or commodities. The Austrian government and the primary financial regulator, the Financial Market Authority (FMA - Finanzmarktaufsicht), generally maintain a technology-neutral and receptive stance towards digital assets and financial innovation, while emphasizing the need for investor protection, market integrity, and security.

The regulatory environment in Austria is characterized by the application of existing financial laws and, crucially, the implementation of EU directives and regulations.

*   **AML/CFT Framework (Pre-MiCA):** Austria transposed the EU's 5th Anti-Money Laundering Directive (AMLD5) into national law, specifically through amendments to the Financial Markets Anti-Money Laundering Act (FM-GwG - Finanzmarkt-Geldwäschegesetz). This brought certain Virtual Asset Service Providers (VASPs) under the FMA's supervision for AML/CFT purposes. VASPs offering services such as crypto-to-fiat exchange, crypto-to-crypto exchange, custodian wallet provision, and crypto transfer services were required to register with the FMA and implement robust AML/KYC procedures. This includes customer due diligence, transaction monitoring, and reporting suspicious activities.
*   **Markets in Crypto-Assets Regulation (MiCA):** As an EU member state, Austria is now primarily governed by the EU's comprehensive Markets in Crypto-Assets Regulation (MiCA). MiCA aims to create a harmonized regulatory framework across the EU for crypto-assets, issuers, and service providers. Key aspects of MiCA became applicable in June 2024 (for stablecoins like ARTs and EMTs) and the remaining provisions became fully applicable on December 30, 2024.
    *   **National Implementation:** Austria passed the MiCA Enforcement Act (MiCA-VVG - MiCA-Verordnung-Vollzugsgesetz) in July 2024, designating the FMA as the competent national authority responsible for supervising MiCA compliance.
    *   **CASP Licensing:** MiCA replaces the previous VASP registration regime under FM-GwG with a mandatory licensing requirement for Crypto-Asset Service Providers (CASPs). Any entity wishing to provide crypto-asset services (custody, exchange, trading platform operation, advice, etc.) in Austria (and passport across the EU) must obtain authorization from the FMA under MiCA. This involves meeting stringent requirements regarding capital, governance, risk management, consumer protection, and AML/CFT compliance. Austria has provided a transitional period (until December 31, 2025) for existing VASPs registered under FM-GwG to obtain MiCA authorization.
    *   **Investor Protection:** MiCA introduces rules for transparency, disclosure for crypto-asset issuance and trading, and rules against market abuse.
*   **Taxation:** Income derived from cryptocurrencies (e.g., gains from selling, staking rewards, interest from lending) is subject to income tax in Austria. Since March 2022, specific rules apply, generally taxing crypto income at a special rate of 27.5%, similar to capital gains from traditional assets. However, commercial trading or mining activities may be taxed at progressive income tax rates (up to 55%) or corporate income tax rates (23% since 2024).
*   **FMA Warnings:** While permitting and regulating the sector, the FMA frequently issues warnings to consumers about the high risks associated with cryptocurrency investments. These risks include extreme price volatility, the potential for fraud (estimating a high percentage of offerings may have fraudulent backgrounds), lack of deposit insurance, and the complexity of the technology. The FMA maintains a list of unauthorized providers and warns against investing via platforms that lack the necessary licenses or registrations.

In summary, Austrian residents can legally engage with cryptocurrencies, but the ecosystem, particularly service providers, operates within a defined and evolving regulatory framework heavily influenced by EU law (MiCA). This framework mandates licensing for service providers and imposes strict AML/KYC obligations to ensure market integrity and combat financial crime.

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**3. Supporting Excerpts:**

*   **On Legality and Regulation:**
    *   "Yes, cryptocurrency activity is legal in Austria, under the rule of the FM-GwG. This Act on Financial Markets and Anti-Money Laundering defines the legality of cryptocurrency activities as being subject to registration to the Financial Markets Authority of Austria." (LegalBison, Dec 2024)
    *   "Individuals and companies are allowed to buy, sell and trade crypto without any specific permit [for themselves, distinct from service provider licenses]." (LegalBison, Dec 2024)
    *   "Cryptocurrencies are legal and widely used in Austria. They are classified as digital assets but not recognized as legal tender." (CEX.IO)
*   **On AML/KYC Requirements (Pre-MiCA VASP regime, principles remain under MiCA):**
    *   "Moreover, certain providers of services concerning cryptocurrencies are currently subject to AML, KYC and customer due diligence requirements, reporting obligations and prior registration as VASPs with the FMA..." (Global Legal Insights, May 2024)
    *   "...the Financial Markets Authority (FMA) became the competent authority to supervise crypto service providers. The main AML/CFT obligations crypto service providers have to follow include: Appropriate record-keeping; Reporting to the FMA; Customer due diligence (PEPs, high-risk countries, etc.); Transaction monitoring." (Scorechain, Aug 2022)
*   **On MiCA Implementation:**
    *   "The European Union's Markets in Crypto-assets Regulation (MiCAR) becomes fully applicable from today [December 30, 2024]. The Austrian Financial Market Authority (FMA), in its capacity as competent authority assumes a key role in the comprehensive regulation and supervision of the Austrian crypto-market." (FMA Austria, Dec 2024)
    *   "Austria's national legislation transposing MiCA, the MiCA Enforcement Act (MiCA-VVG; MiCA-Verordnung-Vollzugsgesetz), was