Austrian FMA warns against fraud with digital currencies

The Austrian Financial Market Authority (FMA) is now also joining the cryptoscene. The supervisory authority issued a warning against virtual currencies, including Bitcoin. The warning is basically similar to the cautious statements of many central banks and government institutions around the world. While other authorities and governments published their warning in 2014, the FMA decides to wait and see when the warning comes out with the increasing popularity of Bitcoin.

The warning, however, tends to focus on the multiplicity of crypto scams, especially the Ponzi scheme that promise particularly high profits. The statements of the FMA advise extreme caution when it comes to virtual currencies and investment models in this area. Since the digital currency sector is unregulated and unregulated, investors are exposed to swindling and fraud. This also means that investors cannot expect compensation for damages or other losses from their investment in digital currencies.

There are many examples of people who have fallen victim to snowball or other pyramid schemes. The MMM Global site, run by the infamous Sergei Mavrodi, is one such scam. Many investors worldwide, despite the shady history of this company, have invested their money – only to lose it in the end.

But it is not only the FMA that is starting investigations into such investments in Austria. There are some investigators in the Austrian Bitcoin community who are trying to raise awareness for such fraud.

The FMA is now working with public prosecutors to investigate the business model of these crypto investment programs. The aim is to find out whether these are criminal offences.

It remains good advice for potential investors to first conduct a fundamental investigation into their goals. Important here are experience reports, appearances in news portals (as with BTC-ECHO) or direct conversations with people from the community. In addition one should be careful with promises which are “too good”. To become a millionaire overnight would certainly be nice, but special precautions should be taken here.

A nice list of potentially fraudulent investments can be found here.

Opinion of the author (Danny de Boer):

“As the popularity of crypto currencies increases, so does the number of newcomers to the field. For all of us digital currencies were once ‘new’, so it is all the more important that we draw attention to so-called ‘scams’.

This view that an investment is particularly lucrative because nobody has yet ‘discovered’ it is dangerous! Exactly this feeling is it, with which cheaters lure ignorant humans into their trap. Almost everyone wants to make fast money (which is not bad in principle) and many also want to get their chance to jump on a train like Bitcoin when it has just started.

Information protects. Before you can win a bet anywhere, you can also lose it completely. In the case of certain ‘coins’, which have pretended to be crypto currency, whole existences and their families have been destroyed. And I don’t wish that to anyone. Stay informed! We are at your side with any questions!”