The Cyprus Securities and Exchange Commission (CySEC) issued on Friday a directive about the registration and operating conditions of providers of services related to cryptocurrencies. According to the guidelines, published only in the Greek language, CySEC provides certain procedures to follow in order to comply with the recent transposition of AMLD5 measures taken in the European Union (EU) to combat Anti-Money Laundering and Counter-Terrorist Financing.
The registration fee for the providers who want to apply before CySEC for authorization under the said directive would be EUR 10,000, and the renewal fee shall be EUR 50,000. In terms of the board’s composition, there should be a minimum of four members: two executives and two non-executives. Furthermore, among the conditions set out in the said directive, the companies should comply with some requirements such as good reputation, appropriate policies, systems and procedures, relevant security policies, and remuneration requirements, as specified by the CySEC.
In addition to the said directive, it is expected that the CySEC will issue a policy statement very soon clarifying other relevant matters. Additionally, there is a CySEC application file available with the updated regulatory requirements to follow the AMLD5 rulings.
It is well admitted by CySEC, who shares the position of the European Securities and Markets Authority (ESMA), that some crypto assets, including the so-called virtual currencies, such as Bitcoin, are highly risky and speculative, and investors must be alert to the high risks of buying and/or holding these instruments, including the possibility of losing all their money. Crypto assets come in many forms but the majority of them remain unregulated in the EU including Cyprus.
In light of all the above, it is quite evident that the incorporation of crypto-asset businesses under the scope of the EU AML legislation under the amended 5th AML Law in Cyprus is a very significant step.
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Disclaimer: The information contained in this article is provided for informational purposes only, and should not be construed as legal advice on any matter. Andria Papageorgiou Law Firm is not responsible for any actions (or lack thereof) taken as a result of relying on or in any way using information contained in this article and in no event shall be liable for any damages resulting from reliance on or use of this information.
The enactment of the 5th Anti Money Laundering Directive via amendment of Law 188(I)/2007 constitutes the introduction of mandatory crypto assets regulation in Cyprus. In light of further emerging national and European regulation, a balance should be struck between initiative and consistency.