AUSTRIA Law and Practice Contributed by: Oliver Völkel, Jara Erhard and Bryan Hollmann, CERHA HEMPEL
tracts between two or multiple parties. However, Austrian courts will not follow the doctrine of “code is law”. Rather, they will use the legal toolkit of inter- pretation to decide what a reasonable party was able to expect from interacting with another party using smart contracts. Note, this does not mean that any interaction with a smart contract must automatically be viewed in con- tractual terms or must result in the conclusion of a contract. It is also widely accepted that smart con- tracts can be used without any contracts being con- cluded. This is the case when a protocol is structured to operate in a fully decentralised manner and without any intermediary (see 2.6 Non-Compliance ). 1.1.5 Industry and Trade Bodies Austria has both institutional and voluntary bodies that perform quasi self‑regulatory functions for the block- chain industry. Within the Austrian Chamber of Commerce ( Wirtschaftskammer Österreich , WKO), CASPs are organised specifically in the subdivision for financial service providers and crypto‑asset service providers. This body is tasked with representing the interests of the industry in legislative proposals and serving as a single point of contact for other stakeholders. In addition, the Digital Assets Association Austria operates as a voluntary interest group, promoting the interests of the industry. 1.2 Crypto-Assets 1.2.1 Property Considerations Ownership As a civil law jurisdiction, the primary legal source for rules on ownership, and property law in general, is codified in the Austrian General Civil Code. In contrast to other civil law jurisdictions such as Germany, under Austrian law the concept of ownership is not limited to tangible assets. Intangible (crypto-)assets can also be subject to ownership and other property rights, provided the technology used ensures that transac- tions of such crypto-assets are recorded immutably and third parties have no way of disposing of one’s crypto-assets. This is the case with decentralised public blockchains such as Bitcoin or Ethereum. Prop-
erty law principles are also applied to smart contract- based token protocols on public chains, again pro- vided that third parties are excluded from disposing of one’s tokens. Centralised or permissioned DLT is treated differently, however. Those systems, and the crypto-assets based on them, are seen as software- as-a-service and are therefore not subject to property law principles. Transfer of Ownership in Crypto-Assets The transfer of ownership of crypto-assets based on public and decentralised DLT (such as Bitcoin or Ether) is subject to general property law principles. Besides an agreement (eg, purchase agreement) which serves as the basis for the ownership transfer, Austrian law requires a “mode of transfer”. In its most basic form, this is a handover of the asset. In the con- text of blockchain this means an on-chain transaction. However, other modes of transfer are valid as well – eg, constitutum possessorium or traditio brevi manu where ownership is transferred without any on-chain transaction occurring. Use of Digital Assets as Collateral Any type of crypto-asset can be used as collateral under Austrian law. While, for the transfer of owner- ship, an on-chain transaction is only one of multiple acceptable modes of transfer, a pledge over crypto- assets is less flexible. If the crypto-assets in ques- tion are currently with the pledgor then an on-chain transaction to an address of the pledgee is required. If the crypto-assets are already in possession of the pledgee but owned by the pledgor (eg, where a CASP uses crypto-assets held for the user), for the pledge to be validly established and enforceable, the pledgor must make visible note of the pledge in its books. In effect, the same principles apply that govern the establishment of collateral arrangements over tangible assets. 1.2.2 Access to Banking Banking/Payment Partners for CASPs CASPs may stumble upon some difficulties finding access/partners for general banking and payment. Despite the absence of broader legal restrictions, there remain some practical challenges for crypto firms seeking to obtain general banking and payment services in Austria.
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