Registration of Crypto-Asset Providers in Cyprus

02/07/2021

Following the transposition of 5th EU Anti-Money Laundering (AML) Directive (EU 2018/843) in to Cyprus Law, providers offering services related to crypto-assets (“Crypto-Asset Service Providers” – “CASPs”) were brought within the scope of the local AML legislation. Furthermore, it was decided that Cyprus CASPs should become approved and registered with the Cyprus Securities and Exchange Commission (CySEC).

CySEC, as the responsible regulatory and supervisory authority, issued on 25 June 2021 the “Directive for the Prevention and Suppression of Money Laundering (Register of Providers of Services Related to Crypto-assets)” (the “Directive”), to provide for the registration and operating conditions in relation to such services.

The Directive covers, among others, the following:

• Registration procedure and conditions
• Capital requirements - CASP must at all times comply with capital adequacy requirements
• Operating and corporate governance requirements
• Composition of the Board of Directors – this must consist of at least 4 persons, 2 of whom must manage the business activities of the applicant (executive directors) and 2 must be independent members
• Notifications to clients
• Procedure for managing and mitigating conflicts of interest
• Notification of material changes requirements
• Registration withdrawal and suspension
• Fees – €10,000 for registration and €5,000 for renewal
• Other CySEC fees

CySEC is expected to publish on its website, the CASPs’ register.  The register must be publicly accessible and must include information such as the commercial name, the legal form and the legal entity identifier of the CASP, its address and the services, which it offers. It is also expected that CySEC will publish soon a Policy Statement clarifying some matters related to the Directive.