AUSTRIA Law and Practice Contributed by: Oliver Völkel, Jara Erhard and Bryan Hollmann, CERHA HEMPEL
or security token offerings, have become increasingly common tools in Austria’s corporate finance land- scape. Additionally, Austria is home to one of the few EU-regulated entities that provide security token
only partially harmonious. On the one hand, Austrian copyright law is technology-neutral and therefore broadly capable of accommodating blockchain-based business models without new legislation, and block- chain technology offers genuinely valuable solutions for long-standing IP problems such as establishing closed chains of title, since all transfers are immuta- bly documented and traceable. On the other hand, significant friction points persist: purchasing an NFT does not transfer any exploitation rights to the linked work, a fact widely misunderstood by market partici- pants; the minting process itself constitutes acts of reproduction and making available to the public under Sections 15 and 18a of the Copyright Act (UrhG), requiring the rights-holder’s consent; the statutory resale right under Section 16b UrhG does not extend to NFT transactions because it is tied to physical originals; and NFTs themselves lack copyrightability as purely machine-generated outputs. Overall, while existing law can be applied to blockchain, there is a clear need for standardised licensing frameworks to bridge these gaps and provide legal certainty for crea- tors and acquirers alike. 1.1.2 Regulatory Sandbox Austria has a regulatory sandbox. It is established with the Austrian FMA and it allows start-ups and exist- ing regulated entities alike to test innovative business models under regulatory supervision in a controlled environment. In order to participate, applicants must provide a comprehensive description of the business model, including how it works, the technology involved and the expected benefits. Applicants must further dem- onstrate a significant economic interest, showing potential benefits to the financial market or economy in Austria. Also, the business model should be ready for market testing, implying that it has moved beyond the conceptual stage and is prepared for real-world application. An application must be filed with the Austrian FMA. The filing can also be done in English. The FMA con- ducts a preliminary review and hands the application over to the Regulatory Sandbox Advisory Council, consisting of representatives from the Ministry of Finance, FMA, Austrian National Bank, and other
exchange services. Austria’s NFT scene
Austria’s NFT scene is also very mature. Besides the above-mentioned crypto stamp, a number of NFT-based online games were developed in Austria, and the technology is used on a continuous basis to tokenise art – eg, of world-famous Austrian painter Gustav Klimt. There are also ongoing efforts to devel- op an “NFT Quality Seal” in Austria. In this context, NFT evaluation guidelines have been introduced to assess NFTs based on economic, technical and legal aspects. Mining, DAOs, DeFi Mining companies are represented in Austria, and DAO projects show how decentralised decision-making can be achieved. Many protocols have chosen Austria as their operational base. In particular, several Swiss foundations behind numerous protocols use Austria as their EU and MiCA gateway. Moreover, Austria is home to truly decentralised finance (DeFi) protocols, which operate without any regulatory supervision, as confirmed by the Austrian Financial Market Authority (FMA). Consulting firms, tax and legal advisers Since the community is so large, a growing num- ber of consulting firms, tax and legal advisers have built extensive expertise. It is safe to say that anyone choosing Austria as their EU hub will find experienced advisers that can help get everything operational quickly. Issues Impacting Blockchain Over Next 12 Months Over the next 12 months, blockchain use will be shaped mainly by regulation, scalability/interoperabil- ity constraints, compliance/AML expectations and the availability of skilled people and robust governance. Interaction With Intellectual Property Laws and Approaches The interaction between blockchain business and existing Austrian intellectual property law has been
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