Cyprus to Impose Strict Penalties on Unregulated Crypto Service Providers
Cyprus is taking action against unlicensed crypto asset service providers (CASPs) by introducing hefty penalties for those operating without registration with the Cyprus Securities and Exchange Commission (CYSEC). The Ministry of Finance has proposed an amendment to the “Prevention and Suppression of Money Laundering Law,” which would impose a penalty of €350,000 or five years in prison, or both, on unlicensed crypto businesses in Cyprus. The legislation is based on penalties imposed in other EU states and aligns with recommendations from the Financial Action Task Force (FATF) and MONEYVAL report.
The proposed amendment requires all crypto asset service providers to register with CYSEC before offering any crypto-related products and services. This move aims to protect investors from illegal activities and money laundering risks.
Penalties Imposed by EU Member States
In Malta, cryptocurrency platforms Bequant Pro Ltd and Bequant Exchange Ltd were fined nearly half a million Euros by anti-money laundering regulators, along with other enforcement actions against non-compliant virtual asset service providers. Malta has also implemented imprisonment for up to six years and fines of up to €15 million.
Luxembourg has imposed fines of up to €5 million for non-licensed crypto businesses, while Belgium has penalties ranging between €400,000 and €800,000. France and Ireland have similar stricter penalties and imprisonment for offenses related to unlicensed crypto businesses.
Hot Take: Cyprus Cracks Down on Unlicensed Crypto Businesses
Cyprus is taking a strong stance against unregulated crypto service providers by imposing strict penalties on those operating without proper registration. By requiring all crypto asset service providers to register with the country’s regulator, Cyprus aims to safeguard investors from the risks of illegal activities and money laundering. This move follows recommendations from international organizations such as the Financial Action Task Force and aligns with penalties imposed by other EU member states.
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