Austrian Financial Market Authority Stops ‘Active Managed Mining’ Operation
The cryptocurrency industry have created a host of legal questions as old definitions are forced on brand new innovations. Should switching between the most profitable coin to mine at each time be considered some type of fund management? Austrian regulators seem to think so. Also Read: Bitcoin in Brief Wednesday: China Fights Impersonators and Fraudsters Unauthorized […]
The cryptocurrency industry have created a host of legal questions as old definitions are forced on brand new innovations. Should switching between the most profitable coin to mine at each time be considered some type of fund management? Austrian regulators seem to think so.
Unauthorized Alternative Investment Fund Management
The Austrian Financial Market Authority (FMA), Austria’s integrated supervisory body, has announced that, by means of a procedural instruction, it prohibited the business model of Invia Gmbh, a Vienna-registered company offering financial services in conjunction with the mining of cryptocurrencies. This was done on the grounds of the FMA’s suspicion that the company was involved in the unauthorized management of an Alternative Investment Fund (AIF) as defined by the country’s relevant regulations.
The Regulators say that the venture was requested to cease the unauthorized business operation. Meanwhile, the procedure concerning this matter is still pending. Invia Gmbh is neither licensed by, nor supervised by, the FMA. The FMA adds that it has decided to communicate this information to the public after having received “a large number of inquiries from consumers.”
According to a promotional forum post from November 2017, Invia offers “Active Managed Mining”. In practice this means for clients that: “You do not have to decide for yourself which cryptocurrency is to be mined, this decides [SIC] the company and thus spares the most lucrative coin. You receive your payment in Ethereum or Bitcoin currency. The company lets a software play in the background, this software decides within 1 minute which coin is lucrative and turns around. This unique piece of software serves as a hardware control, aligning it with the ‘most profitable’ crypto currency [SIC] available at any given time. The minted Coin is then converted to Bitcoin or Ethereum. Thanks to this software, it is possible to produce more coins overall.”
This type of service is hardly new, as many cryptocurrency mining pools and clouds, as well as just software solutions, have been offering the same for years now. It is possible that by promoting the company to newbies in the field Invia triggered the FMA, which didn’t notice other services before.
Should active managed mining be considered similar to management of an investment fund, requiring an authorization? Share your thoughts in the comments section below.
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