by Andria PapageorgiouDORA: Why it is relevant & why is it relevant to you?
The Digital Operational Resilience Act (DORA) is a significant development in EU regulation, compelling financial entities to ensure consistent cybersecurity and operational resilience maturity levels across all their operations within the EU. With a two-year preparatory phase, organizations face a significant task of implementation and demonstration of compliance.
To navigate this transition effectively, financial institutions must conduct comprehensive gap assessments to gauge their readiness vis-à-vis DORA, identifying areas necessitating further investment and prioritization. Proactively addressing these gaps positions businesses to meet more complex requirements such as supply risk management, threat intelligence, and advanced security testing, thus gaining a competitive edge in the market.
DORA marks a substantial shift for entities under ESMA or EIOPA supervision and banks already subject to existing EBA guidelines on banking supervision. Moreover, it extends its scope to encompass previously less regulated stakeholders in the financial sector, including crypto-asset service providers, intermediaries managing alternative investment funds, crowdfunding service providers, cloud-service providers, and ICT third-party service providers.
One of DORA’s key focuses is on third-party risk management, necessitating entities to ensure the resilience of their critical ICT third-party service providers. This requires close collaboration and joint efforts to satisfy regulatory expectations, particularly in supporting the delivery of essential business services.
DORA officially entered into force at the beginning of 2023, initiating a two-year implementation period. Financial entities are thus expected to achieve compliance with the regulation by early 2025. As this deadline approaches, proactive engagement with DORA compliance becomes essential to avoid penalties and maintain operational continuity.
In light of these developments, Andria Papageorgiou Law Firm is committed to assisting organizations in navigating the complexities of DORA compliance. With our outsourced DPO services and regulatory compliance consulting, tailored to address the specific requirements of DORA, we ensure that businesses are well-equipped to meet regulatory obligations and uphold operational resilience in an evolving digital landscape.
Contact us today at info@apapageorgiou.com to learn more about how we can support your journey toward DORA compliance.
Disclaimer: The information contained in this article is provided for informational purposes only, and should not be construed as financial or investment or 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.
by Andria PapageorgiouCySEC Circular on EBA Guidelines: Enhancing Anti-Money Laundering Measures for Crypto-Asset Service Providers
We would like to draw your attention to Circular C640 (the “Circular”), issued by the Cyprus Securities and Exchange Commission (the “CySEC”) on the 26th of April 2024, for the purposes of informing Regulated Entities, as these defined therein, about European Banking Authority’s Guidelines amending Guidelines EBA/2021/02 on customer due diligence and the factors credit and financial institutions
should consider when assessing the money laundering and terrorist financing risk associated with individual business relationships and occasional transactions under Articles 17 and 18(4) of Directive (EU) 2015/849 – Guidance to crypto-asset service providers to effectively manage their exposure to ML/TF risks
On January 16, 2024, the European Banking Authority (EBA) extended its Guidelines on ML/TF risk factors to CASPs, signifying a significant stride in the EU’s efforts to combat financial crime. The new Guidelines (EBA/GL/2024/01) underscore ML/TF risk factors and mitigating measures that CASPs need to adopt, recognizing the potential abuse of CASPs for illicit financial activities.
The risks associated with CASPs are manifold, ranging from the rapidity of crypto-asset transfers to the anonymity features embedded in certain products, heightening the susceptibility to ML/TF activities. Hence, CASPS must grasp these risks comprehensively and implement effective measures to mitigate them.
The amended Guidelines serve to equip CASPs with a framework for identifying these risks, offering a non-exhaustive list of factors indicating exposure to varying levels of ML/TF risk. By leveraging these risk factors, CASPs can gain insights into their customer base and pinpoint areas of vulnerability, thereby fine-tuning their mitigating measures, including the use of blockchain analytics tools.
Recognizing the interconnectedness of the financial sector, the Guidelines extend guidance to credit and financial institutions with CASPs as clients or exposure to crypto assets. This risk is exacerbated when institutions engage with unregulated crypto-asset service providers.
In essence, these Guidelines foster a unified understanding of ML/TF risks associated with CASPs and outline the requisite steps for CASPs and other financial institutions to manage these risks effectively. The amended Guidelines will come into effect on December 30, 2024.
In line with its overarching supervisory approach, CySEC urges all Regulated Entities to adhere to the Guidelines and demonstrate the appropriateness of their AML/CFT policies, controls, and procedures in light of identified ML/TF risks, thus ensuring robust measures to combat financial crime.
Should you have any further questions, please do not hesitate to contact us at info@apapageorgiou.com.
Disclaimer: The information contained in this article is provided for informational purposes only, and should not be construed as financial or investment or 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.
by Andria PapageorgiouSupervisory priorities for 2024, targets CIFs providing services on a cross border basis
Should you have any further questions, please do not hesitate to contact us at info@apapageorgiou.com.
Disclaimer: The information contained in this article is provided for informational purposes only, and should not be construed as financial or investment or 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.
by Andria PapageorgiouCircular C589 – MONEYVAL’s report on money laundering and financing of terrorism risks in the world of virtual assets
We would like to draw your attention to Circular C589 (the “Circular”), issued by the Cyprus Securities and Exchange Commission (the “CySEC”) on the 18th of July 2023, for the purposes of informing Regulated Entities, as these defined therein, about MONEYVAL’s Report on money laundering and financing of terrorism risk in the world of virtual assets (the “Report”).
A. Purpose:
The Report purports to present in an integrated manner an overview of the money laundering and financing of terrorism risks in the world of virtual assets (the “VAs”) and their service providers in MONEYVAL members. In order to do this, the Report includes the following:
- horizontal analysis of MONEYVAL’s members’ level of compliance with the Financial Action Task Force (the “FATF”) Recommendation 15;
- an overview of the measures taken to regulate and supervise virtual asset service providers (the “VASPs”) sector; and
- features of the identified risks that criminals use VASPs and VAs to launder proceeds of crimes (i.e. exchanges, exchange offices, aggregators, and other cryptocurrency platforms including e-gaming, sports betting, and NTFs).
In particular, the Report integrates and analyses data obtained from MONEYVAL members across multiple issues, relating to (a) how members regulated the activity of issuance of Vas and operation of VASPs; (b) whether the Law Enforcement Authorities (LEAs) have adequate powers and tools to investigate, locate and impose interim measures in respect of Vas; (c) the types of VA platforms used for financial support of criminal activity; (d) examples of cases investigated by the relevant authorities with description of criminal schemes involving the virtual asset elements that have been identified; and (e) other data relevant to the goals of the study.
B. Main Provisions:
In view of the above, the Report has been structured into the following four (4) sections:
1. Horizontal review of compliance with FATF Recommendation 15:
FATF has published documents that are aimed at helping jurisdictions and the private sector to comply with the new AML/CFT requirements for VAs and VASPs (available here and here). Due to the peculiarities of the sector and the relatively recent adoption of the standard, the vast majority of MONEYVAL members have not yet fully implemented these requirements (i.e. of the 23 jurisdictions that have been assessed since June 2021 for their compliance with Recommendation 15, the majority require major or moderate improvements). In particular, further improvements are needed in assessing ML/TF risks, supervision, and the application of AML/CFT preventative measures.
2. Assessment of VA and VASP risks:
As already mentioned above, not all members have assessed the ML/TF risks posed by VAs and VASPs, or if such risk assessment has been conducted in many cases it lacks depth. In the case of Andorra that carried out its second national risk assessment back in 2020, it is noted that the risk assessment at the national level would start with an inventory (i.e. when VASPs must be licensed or registered, leaving the authorities with the tasks of estimating if and to which extent unregistered entities are still servicing clients in the respective jurisdiction) of the registered entities in the jurisdiction and determining the materiality of the VASP sector. However, in practice, jurisdictions experience challenges in identifying unregistered or unlicensed VASP activity in their jurisdiction.
In view of the above and following the first inventory of VASPs, a more in-depth analysis of the sector was undertaken. There is a risk that if the work conducted by Andorra indicates that there are no businesses operating domestically that should be registered, then VAs and VASPs become less of a focus. An assessment must be made about the use of VAs in the country even if there are no registered VASPs (for instance, whether customers in the domestic jurisdiction are obtaining services in another jurisdiction).
3. Risk-Based Approach Supervision of the VASP Sector:
The relevant section of the Report outlines the different approaches taken by members to license or register domestic VASPs and to implement a risk-based supervisory framework for the VASP sector. In brief, the following are noted:
- VAs is defined as a digital representation of value that can be digitally traded or transferred and can be used for payment or investment purposes and do not include digital representations of FIAT currencies, securities, and other financial assets that are already covered elsewhere in the FATF Recommendations.
- VASP is any natural or legal person that provides as a business activity one or more of the following activities or operations for or on behalf of another natural or legal person: (i) exchange between virtual assets and FIAT currencies; (ii) exchange between one or more forms of virtual assets; (iii) transfer of virtual assets; (iv) safekeeping and/or administration of virtual assets or instruments enabling control over virtual assets; and (v) participation in and provision of financial services related to an issuer’s offer and/or sale of a virtual asset.
- The analysis shows that not all members included natural persons in the definition of VASPs.
- A risk-mitigating measure for VASP activity is the application of market entry controls and of adequate risk-based supervision for AML/CFT purposes in the sector.
- Recommendation 15 allows countries to choose between licensing or registration of VASPs, providing that at a minimum, VASPs would be required to be licensed or registered in the jurisdiction(s) where they were created.
- MONEYVAL members have implemented different approaches to supervision (i.e. licensing or registration authority is not always the same authority that conducts the AML/CFT supervision of VASPs).
- In supervising the VASP sector most of the MONEYVAL members are at the beginning of implementation. Not all supervisors are comprehensively resourced in terms of staffing and knowledge, and the risk-based approach is rarely tailored to a sector-specific risk assessment.
- The volume and flow of cross-border transactions is one important element that supervisors should consider when determining the risk of the VASP sector and conducting supervision activities.
- The availability of sanctions for VASP supervisors in MONEYVAL members differs in the scope and mounts of the sanctions that can be applied.
4. Law Enforcement and Operational Issues:
The capabilities and approaches of authorities in MONEYVAL countries to investigate ML/TF cases involving the use of VAs and to impose interim measures are examined in the relevant section of the Report. In particular, a number of case studies from the MONEYVAL region shed light on the use of VAs for money laundering purposes, such as the types of understanding crimes that are normally associated with such ML cases, as well as the modus operandi and typologies as to how such money laundering cases are perpetrated, are outlined within the Report. VAs are being used and can probably be used interchangeably with FIAT currencies when looking at typologies, as per the following investigated cases:
- Theft of VAs through “typosquatting” – Isle of Man (in cooperation with UK and Netherlands);
- Sale of fake VAs – Azerbaijan;
- Use of money mules – Latvia;
- Drug and arms dealing – Slovak Republic; and
- Laundering of drug trafficking proceeds – Malta.
C. Next Steps:
CySEC considers the Report to be of assistance to the Regulated Entities engaging or seeking to engage in VA activities, in understanding their AML/CFT risks and obligations and how they can effectively comply with these obligations.
To this end, it is expected by CySEC that all Regulated Entities will study the Report and take its content into account when assessing AML/CFT risks, thereby improving the effectiveness of the measures and procedures applied.
Should you have any further questions, please do not hesitate to contact us at info@apapageorgiou.com.
Disclaimer: The information contained in this article is provided for informational purposes only, and should not be construed as financial or investment or 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.
by Andria PapageorgiouESAs public consultation on DORA
We would like to draw your attention that the European Supervisory Authorities (EBA, EIOPA, and ESMA – the ESAs) launched yesterday, 19th of June 2023, a public consultation on the first batch of policy products under the DORA.
This includes four draft regulatory technical standards (RTS) and one set of draft implementing technical standards (ITS). These technical standards aim to ensure a consistent and harmonized legal framework in the areas of ICT risk management, major ICT-related incident reporting, and ICT third-party risk management.
DORA entered into force on the 16th of January 2023 and will apply from the 17th of January 2025 aiming to enhance the digital operational resilience of entities across the EU sector and to further harmonize key digital operational resilience requirements for all EU financial entities.
This regulatory framework covers key areas such as:
- ICT risk management,
- ICT-related incident management and reporting,
- digital operational resilience testing and
- management of ICT third-party risk.
DORA has mandated the ESAs to jointly develop altogether 13 policy instruments in two batches. The first batch of technical standards, are the following:
- RTS on ICT risk management framework and RTS on simplified ICT risk management framework;
- RTS on criteria for the classification of ICT-related incidents;
- ITS to establish the templates for the register of information;
- RTS to specify the policy on ICT services performed by ICT third-party providers.
The ESAs expect to submit these draft technical standards to the European Commission by 17 January 2024.
Comments to this consultation can be sent to the ESAS by the 11th of September 2023.
Should you have any further questions, please do not hesitate to contact us at info@apapageorgiou.com.
Disclaimer: The information contained in this article is provided for informational purposes only, and should not be construed as financial or investment or 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.
by Andria PapageorgiouCySEC Circular C576 – Adoption of the European Banking Authority Guidelines
We would like to draw your attention to Circular C576 (the “Circular”) issued by the Cyprus Securities and Exchange Commission (the “CySEC”) on the 2nd of June 2023, for the purposes of informing the Cyprus Investment Firms (the “CIFs”) about its decision to adopt the following European Banking Authority’s (the “EBA”) guidelines, that have been previously published within 2022, by incorporating them into its supervisory practices and regulatory approach:
- (a) Guidelines on the benchmarking exercises on remuneration practices and the gender pay gap under the Directive (EU) 2019/2034 (the “Guidelines on benchmarking”). Our previous notification email is attached herein; and
- (b) Guidelines on data collection exercises regarding high earners under Directive 2013/36/EU and under Directive (EU) 2019/2024 (the “Guidelines on high earners”). Our previous notification email is attached herein.
In brief, kindly note the below:
1. Guidelines on benchmarking:
The relevant guidelines specify how competent authorities shall collect from investment firms the remuneration and the gender pay gap data and how they will then submit them to EBA. It is noted that the said data shall be collected and submitted at the individual level whereas where Article 7 of IFR applies, this data shall be collected and submitted only at the level of consolidation set out therein. Please note that the Guidelines on benchmarking should be read in conjunction with the EBA Guidelines on sound remuneration policies under IFD.
In view of the above and pursuant to Section 28(1) of the Prudential Supervision of Investment Services Law of 2021 (the “Prudential Supervision Law”), CySEC shall collect the information disclosed in accordance with Article 51(1)(c) and (d) of IFR as well as the information provided by CIFs on the gender pay gap and use that information to benchmark remuneration trends and practices. Pursuant to Section 28(4) of the Prudential Supervision Law, CySEC shall provide the collected information to EBA in order to benchmark remuneration trends and practices at the Union level.
Therefore, the following actions should be taken by CIFs in regard to the topics presented below:
| Related Topic | Information to be submitted | Deadline |
| Remuneration Data | o Information on the remuneration of all staff, as set out in Annex I of Guidelines on benchmarking | 15th of June of each calendar year* |
| o Additional information on remuneration for identified staff, as set out in Annex II and Annex III of Guidelines on benchmarking | ||
| o Information on derogation as specified in Annex IV of Guidelines on benchmarking | ||
| Gender Pay Gap | o Information set out in Annex V of Guidelines on benchmarking regarding the financial year 2023 | 15th of June every three years, starting from 2024 |
*It is clarified that the remuneration data outlined above should be submitted by the 31st of August 2023 the latest, regarding the financial year 2022.
2. Guidelines on high earners:
The objective of the data collected on high earners is to analyse and publish year-to-year developments in the number of individuals in institutions and investment firms earning at least EUR 1 million within the European Union (the “EU”) and the European Economic Area (the “EEA”), and within the different Member States, and to assess the major components of remuneration awarded to high earners in different business areas. The said information can be used together with other remuneration benchmarking data to analyse the application of remuneration policies within the EU and EEA and the trends in remuneration practices so as to improve the relevant legal framework.
In view of the above, CIFs should submit to CySEC data regarding high earners (i.e. staff member(s) earning a remuneration of at least EUR 1 million in the reported financial year) so as for the latter to submit such information to EBA.
Please note that high earners data should be reported, as applicable, at the level of consolidation set out in Article 7 of IFR and should concern all the high earners’ data for all entities and branches within the highest level of prudential consolidation. In the case of standalone investment firms, high earner’s data should be reported on an individual basis. The data submitted should also include data relevant to EU/EEA branches.
In this respect, please note the following:
- Where CIFs do not have high earners to report, it is not necessary to submit this information, unless explicitly requested by the CySEC.
- High earners data should be submitted to CySEC each year for any given financial year by the 15th of June of the next calendar year.
- It is clarified that high earners’ data should be submitted by the 31st of August 2023 the latest, regarding the financial year 2022.
3. Method of submission:
The information outlined in points 1 and 2 above should be submitted through CySEC’s XBRL Portal only, which is expected to be updated by the 30th of June 2023.
CIFs are urged to consider the Guidelines on benchmarking & Guidelines on high earners and where necessary, take actions to ensure compliance with their provisions.
Should you have any further questions, please do not hesitate to contact us at info@apapageorgiou.com.
Disclaimer: The information contained in this article is provided for informational purposes only, and should not be construed as financial or investment or 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.
by Andria PapageorgiouRegulation on Markets in Crypto-assets: Navigating the Evolving Landscape
A. Introduction:
In recent years, the rapid growth of cryptocurrencies and the emergence of blockchain technology have led to a significant expansion of the crypto-assets market. This growth, while exciting, has also raised concerns regarding investor protection, market integrity, and financial stability. As a result, regulatory authorities around the world have been striving to develop comprehensive frameworks to regulate markets in crypto-assets. This article aims to explore the evolving regulatory landscape and its implications for market participants.
B. The Global Context:
Crypto assets, including cryptocurrencies and tokenized assets, operate in a borderless digital environment, posing challenges for traditional regulatory frameworks. Recognizing the need for regulatory clarity, several jurisdictions have taken proactive steps to establish frameworks that balance innovation with investor protection.
One notable initiative is the European Union’s proposed Regulation on Markets in Crypto-assets (MiCA). MiCA aims to create a harmonized regulatory framework for crypto-assets and related service providers within the EU. The regulation seeks to enhance transparency, protect consumers, and foster market integrity while promoting innovation.
C. Key Provisions of MiCA:
- Classification and Authorization: MiCA introduces a comprehensive classification system for crypto-assets, distinguishing between e-money tokens, asset-referenced tokens, and significant or non-significant tokens. It also establishes a licensing regime for crypto-asset service providers, ensuring they meet strict operational and governance standards.
- Market Conduct and Investor Protection: MiCA sets out rules on the marketing, sale, and provision of crypto-assets and related services. It aims to enhance investor protection by requiring clear and accurate disclosure of risks, imposing conduct of business obligations on service providers, and establishing safeguards against market abuse and fraud.
- Operational Requirements: The regulation imposes operational requirements on crypto-asset service providers, including capital requirements, custody rules, and risk management obligations. These provisions aim to ensure the security and resilience of market infrastructure and protect customer assets.
- Cross-Border Passporting: MiCA introduces a mechanism for cross-border passporting, allowing authorized service providers to operate across EU member states without the need for additional authorizations. This harmonization is expected to foster competition, facilitate market access, and streamline regulatory compliance.
D. Challenges and Opportunities:
Implementing regulations on markets in crypto-assets is a complex task, requiring a balance between regulatory oversight and fostering innovation. Challenges include addressing the inherent volatility of crypto-assets, the risk of money laundering and terrorism financing, and the need for international cooperation.
However, clear and consistent regulatory frameworks can also bring opportunities. Regulatory certainty can attract institutional investors, encourage responsible innovation, and provide a level playing field for market participants. It may also help mitigate systemic risks associated with the growing interconnections between traditional financial systems and crypto-assets.
E. Conclusion:
The regulation of markets in crypto-assets is an ongoing and dynamic process, driven by the need to protect investors, maintain market integrity, and foster innovation. Initiatives like MiCA demonstrate a commitment to providing legal clarity and regulatory oversight within the European Union. As the global regulatory landscape continues to evolve, it is essential for market participants to stay informed, adapt to changing requirements, and engage in constructive dialogue with regulators to shape the future of this exciting and transformative market.
Should you have any further questions, please do not hesitate to contact us at info@apapageorgiou.com.
Disclaimer: The information contained in this article is provided for informational purposes only, and should not be construed as financial or investment or legal advice on any matter. It is important to conduct thorough research and consult with financial professionals before making any investment decisions related to cryptocurrencies or digital banking. 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.
by Andria PapageorgiouCryptocurrencies: Evaluating Risks and Assessing Their Future in Digital Banking
A. Introduction:
The emergence of cryptocurrencies has disrupted traditional financial systems, offering decentralized and secure alternatives to conventional banking. However, as with any financial innovation, cryptocurrencies come with inherent risks. In this article, we will delve into the risks associated with cryptocurrencies and explore their potential future in the realm of digital banking.
B. Cryptocurrency Risks:
- Price Volatility: One of the primary risks associated with cryptocurrencies is their extreme price volatility. The value of cryptocurrencies can experience significant fluctuations within short periods. Investors must be prepared for the possibility of substantial gains or losses in their cryptocurrency holdings.
- Regulatory Uncertainty: Cryptocurrencies operate in a regulatory landscape that is still evolving. The lack of standardized regulations across jurisdictions introduces uncertainties regarding their legal status, taxation, and consumer protection. Regulatory changes can impact the viability, adoption, and usage of cryptocurrencies, leading to potential risks for investors and digital banking institutions.
- Cybersecurity Vulnerabilities: Cryptocurrencies face cybersecurity threats due to their digital nature. Hacking attempts, phishing attacks, and theft pose significant risks to individuals and digital banking platforms that deal with cryptocurrencies. Robust security measures, such as secure wallets and strong authentication protocols, are essential to safeguard against these risks.
- Market Liquidity: Cryptocurrency markets may experience liquidity challenges, particularly for less-established or low-volume cryptocurrencies. Limited liquidity can impact the ability to buy or sell cryptocurrencies at desired prices, leading to potential trading difficulties and increased transaction costs.
- Technological Risks: Cryptocurrencies rely on underlying technologies, such as blockchain, which are still evolving. Technical vulnerabilities, software bugs, and network disruptions can pose risks to the stability and reliability of cryptocurrencies. Ongoing technological advancements and upgrades are necessary to mitigate such risks.
C. The Future of Cryptocurrencies in Digital Banking:
Despite the risks, cryptocurrencies have the potential to shape the future of digital banking in several ways:
- Increased Financial Inclusion: Cryptocurrencies can provide access to financial services for the unbanked and underbanked populations, enabling secure and efficient cross-border transactions without the need for traditional banking intermediaries.
- Streamlined Cross-Border Payments: Cryptocurrencies can facilitate faster and cheaper cross-border transactions, eliminating intermediaries and reducing transaction fees. Digital banking institutions can leverage cryptocurrencies to offer efficient global payment solutions to their customers.
- Decentralized Finance (DeFi): Cryptocurrencies underpin the growth of decentralized finance, enabling various financial services, including lending, borrowing, and yield farming, without traditional intermediaries. DeFi platforms can integrate cryptocurrencies to provide innovative financial products to users.
- Central Bank Digital Currencies (CBDCs): Several central banks worldwide are exploring the development of CBDCs, which are digital currencies issued and regulated by central authorities. CBDCs can potentially enhance the efficiency and transparency of digital banking systems, bridging the gap between traditional currencies and cryptocurrencies.
D. Conclusion:
Cryptocurrencies have emerged as a disruptive force in the financial industry, offering unique advantages and challenges. Understanding the risks associated with cryptocurrencies is crucial for individuals and digital banking institutions venturing into this domain. While risks such as price volatility and regulatory uncertainties persist, cryptocurrencies hold the potential to transform digital banking by enabling financial inclusion, streamlining cross-border payments, fostering decentralized finance, and paving the way for central bank digital currencies.
As the digital banking landscape continues to evolve, carefully navigating the risks and leveraging the opportunities presented by cryptocurrencies will be pivotal for the future of the industry.
Should you have any further questions, please do not hesitate to contact us at info@apapageorgiou.com.
Disclaimer: The information contained in this article is provided for informational purposes only, and should not be construed as financial or investment or legal advice on any matter. It is important to conduct thorough research and consult with financial professionals before making any investment decisions related to cryptocurrencies or digital banking. 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.
by Andria PapageorgiouCySEC New Directive for the Registration of Crypto Providers
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.
Should you have any further questions, please do not hesitate to contact us at info@apapageorgiou.com.
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.