Cyprus Plans to Tighten Regulations for Crypto Industry
Cyprus, known as one of the friendliest European jurisdictions for crypto, is considering implementing stricter regulations for the industry. The Ministry of Finance in Cyprus has proposed amendments to the existing Prevention and Suppression of Money Laundering Law, aiming to align the country with international anti-money laundering and terrorism financing standards set by the Financial Action Task Force (FATF) and the recommendations of the MONEYVAL report.
Registration Requirements and Penalties
Under the proposed amendments, all crypto service providers in Cyprus will be required to register with the Cyprus Securities and Exchange Commission (CySEC), the financial regulator. Failure to comply with these requirements could result in penalties ranging from fines up to €350,000 to imprisonment for up to five years, or a combination of both.
Concerns from the Cyprus Bar Association
The amendments have faced some reservations from the Cyprus Bar Association, particularly regarding the provision that requires crypto service providers with licenses from other European countries to also register with CySEC. This provision was included in the amendments by CySEC itself.
Business Registration in Cyprus
Crypto companies have reported minimal difficulties when registering their businesses in Cyprus. In September, eToro, a crypto-friendly brokerage firm, obtained a Crypto Asset Service Provider (CASP) registration from CySEC. ByBit also received the same license in June. However, Binance, the world’s largest crypto exchange, chose to deregister from the Cyprus market in July due to increasing regulatory pressure and a desire to focus on larger EU markets.
Hot Take: Cyprus Strengthens Crypto Regulations for AML/CFT Compliance
Cyprus is taking steps to enhance its regulation of the crypto industry by proposing amendments to align with international anti-money laundering and terrorism financing standards. These amendments require all crypto service providers to register with the financial regulator, CySEC, or face significant penalties. While some concerns have been raised by the Cyprus Bar Association, crypto companies have generally experienced a smooth registration process in Cyprus. This move towards stricter regulations reflects a global trend of governments seeking to mitigate risks associated with cryptocurrencies and ensure compliance with international standards.
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