Registration of Crypto-Asset Providers in Cyprus
In June of 2021 the Cyprus Securities and Exchange Commission (CySEC) introduced the Crypto Asset Service Providers (CASP) Registry; its operation, registration and supervision conditions. This major new development requires interested applicants to apply to the Cyprus Securities and Exchange Commission (CySEC) for registration, so as to be able to provide crypto exchange services within a regulatory framework.
Crypto asset service provider, as defined under 2(1) of the AML Law.
“Provider of Services relating to Crypto Assets” is defined as a person who provides or carries out one or more of the following services or activities to another person or on behalf of another person, which do not fall within the services or activities of the liable entities referred to in paragraphs (a) to (i) of Article 2A:
- Exchange between cryptocurrencies and fiat money;
- Exchange between crypto assets;
- The management, transfer, retention, and / or safekeeping, including custody, of cryptocurrencies or cryptographic keys or means enabling control over cryptocurrencies;
- Offering and / or selling cryptocurrencies, including the initial public offering; and
- Participation in and / or provision of financial services related to the distribution, offering and / or sale of cryptocurrencies, including the initial public offering.
As such, a Crypto Asset Services Provider (CASP), within the meaning of the Prevention and Suppression of Money Laundering and Terrorist Financing Law (AML/CFT Law), that provides services in or from Cyprus, must formally register with the Cyprus Securities and Exchange Commission (CySEC).
A Crypto Asset Services Provider (CASP) established in the EEA and registered with one or more EEA National Competent Authorities for AML/CFT purposes in relation to all services or activities undertaken or intended to be undertaken in Cyprus (i.e. involving residents of Cyprus, including natural or legal entities based in Cyprus), must submit a notification, providing evidence in relation to a valid registration for each service or activity. Where these services or activities are not covered by the framework that governs the registration for AML/CFT purposes, the Crypto Asset Services Provider (CASP) should submit an application to be registered as a Crypto Asset Services Provider (CASP) with the Cyprus Securities and Exchange Commission (CySEC).
Newly formed businesses intending to offer services which come under Directive 269/2021 must register with the Cyprus Securities and Exchange Commission (CySEC) before commencing their operations in or from Cyprus.
Existing businesses that demonstrate a material existing crypto asset activity will need to submit an application before the end of October 2021 and be fully compliant with the AML/CFT Law and the Directives issued pursuant to the AML/CFT Law.