Our law firm can assist with the incorporation, legal support and regulatory licensing of Crypto Exchanges in Cyprus. Our experience and competence allows your business to comply with EU Laws.
We have deep knowledge of Cypriot and European legislation and are happy to share with you our unique experience in obtaining licenses for Crypto Exchange Offices, Cryptocurrency Exchanges and ICO projects.
Cyprus initially introduced its Crypto Asset Service Providers (CASP) framework in June 2021 under local anti-money laundering (AML) legislation. Under that regime, interested applicants registered with the Cyprus Securities and Exchange Commission (CySEC) to provide crypto services in compliance with the Prevention and Suppression of Money Laundering and Terrorist Financing Laws of 2007–2021.
However, in line with the EU’s broader crypto regulation initiatives, MiCA (Markets in Crypto-Assets Regulation) has replaced the local CASP framework. From 17 October 2024, CySEC ceased accepting applications under the local regime. A preliminary phase for MiCA applications began on 13 November 2024, allowing prospective CASPs to submit draft applications in anticipation of MiCA’s full commencement date of 30 December 2024. Since then, new crypto-asset service providers in Cyprus must apply for authorisation exclusively under MiCA.
Under MiCA, entities offering crypto-asset services—such as the exchange, custody, or transfer of crypto assets—must seek authorisation in their home EU Member State. For Cyprus, CySEC is the competent authority responsible for overseeing applications, supervising ongoing compliance, and protecting investors’ interests.
Before MiCA, service providers established in the EEA (European Economic Area) and already registered for AML/CFT (Anti-Money Laundering/Countering the Financing of Terrorism) purposes with another EEA authority could notify CySEC if they operated in or from Cyprus. Under the new MiCA regime, those providers may still rely on certain passporting rights once authorised in one EU Member State, but they must ensure compliance with MiCA authorisation requirements for all services they provide and keep CySEC informed if Cyprus is part of their operational scope.
New market participants intending to offer crypto services in or from Cyprus must now prepare and submit their application under MiCA to CySEC before commencing operations. Existing businesses that had been active under the local CASP regime must transition to MiCA, ensuring full compliance with the new regulatory framework and all relevant AML/CFT provisions.
Under MiCA, a “Crypto-Asset Service Provider” (CASP) is defined as any legal person or entity whose occupation or business involves providing one or more of the following services to third parties on a professional basis:
Cyprus stands out as a premier destination for establishing a CASP under MiCA. The island’s progressive regulatory framework, competitive tax environment, and thriving fintech sector make it an ideal launchpad for companies looking to expand throughout the European Union.
With MiCA now fully in force, securing a CASP license in Cyprus grants seamless market access to over 450 million consumers across the European Union. Backed by the CySEC’s reputation for clarity and innovation in its oversight, license holders benefit from a well-structured, future-ready regulatory ecosystem.
One of MiCA’s key benefits is its single licensing regime. Once authorised in any EU Member State, CASPs can offer services across the entire European Union without having to apply for additional licenses. This streamlines operations, cuts costs, and accelerates market entry for crypto businesses.
Beyond regulatory advantages, Cyprus offers a compelling business environment for CASPs. The country boasts a corporate tax rate of just 12.5%, one of the lowest in the EU, alongside a wide network of double taxation treaties that enhance cross-border efficiency.
Coupled with a highly skilled, multilingual workforce and a strategic geographic position bridging Europe, Africa, and Asia, Cyprus provides a cost-effective and globally connected base for crypto firms aiming to leverage MiCA’s opportunities.
MiCA groups CASP licences by the types of services offered and assigns permanent minimum capital requirements. In Cyprus, these classes and capital thresholds align closely with the previously established categories.
| Class | Services | Min. Capital |
|---|---|---|
| Class 1 |
CASPs authorised for one or more of the following:
|
EUR 50,000 |
| Class 2 |
CASPs authorised for any Class 1 service(s) and any of the following:
|
EUR 125,000 |
| Class 3 |
CASPs authorised for any Class 2 service(s) and:
|
EUR 150,000 |
Beyond the minimum capital requirements, MiCA mandates that CASPs maintain prudential safeguards equal to the higher of:
CASPs must hold these reserves in the form of own funds, which can include Common Equity Tier 1 (CET1) capital (e.g., equity shares or retained earnings) or insurance policies covering operational risks, provided they meet MiCAR’s standards. This flexibility allows firms to adapt their financial strategies while ensuring client protection.
To initiate the authorisation process for establishing a cryptocurrency exchange or broader crypto-asset services business in Cyprus under MiCA, a comprehensive application file must be prepared.
Under Article 62 of MiCA, a CASP application requires:
Under MiCA’s timelines, once CySEC deems an application complete, it must decide on authorisation within 40 working days.
CySEC first acknowledges receipt within five working days and then has 25 working days to determine whether the application file is complete. When the file is confirmed as complete, the formal 40-day authorisation assessment begins.
This process can be more efficient than the old local regime’s six-month assessment window, provided the application and supporting materials are well-prepared.
Applicants seeking to become licensed crypto-asset service providers in Cyprus under MiCA must meet certain legal, managerial, and operational conditions:
Under MiCA, the fee for examining a CASP application in Cyprus is EUR 10,000, which is non-refundable if the application is ultimately declined. Upon successful authorisation, no extra fee is charged for the initial year, but a EUR 5,000 renewal fee applies annually thereafter.
Licensed entities must maintain ongoing compliance with MiCA and local AML/CFT legislation. This includes continuous monitoring of operational activities, regular reporting to CySEC, adherence to capital requirements, prompt updates regarding any changes in corporate structure, and cooperation with regulatory inspections. Firms are also expected to remain vigilant regarding industry-wide developments, especially in cybersecurity and new technological solutions related to crypto assets.
We offer comprehensive support for MiCA compliance in Cyprus:
With our expertise in Cypriot and EU law, we empower crypto businesses to succeed in the MiCA era. Contact us to launch or transition your crypto exchange in Cyprus today.
