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Cyprus opens its doors to crypto providers

NicosiaThe Cyprus Securities and Exchange Commission (CySEC) issued last week a directive in relation to the registration of Crypto-Asset Service Providers (CASPs) on the island.

In the context of the implementation of pan-EU requirements including CASPs under the 5th AML Directive, Cyprus recently updated its definition of obliged entities under the Prevention and Suppression of Money Laundering Law 2007 to bring CASPs into its scope. Moreover, Cyprus authorities have also decided that Cyprus CASPs should become approved and registered with CySEC.

CySEC issued the relevant directive on 25 June 2021, which includes details outlining the process of registration. According to directive, CySEC shall 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 its services.

On condition that, the applicant pursuing registration provides all requested information and documents, and also ensures that persons holding management positions with the applicant are honest and competent, CySEC will approve registration in the CASPs’ register.

It is also important to note that in the case of the Board of Directors of the applicant, this must consist of at least four persons, of which two must manage the business activities of the CASP and two must be independent members.

As far as capital is concerned, CASP must comply at all times with capital adequacy requirements. As a minimum, CASPs offering only investment services must comply with the requirements of Common Equity Tier 1 capital as included in arts 26 to 30 of the 575/2013 Capital Requirements Regulation (CRR).