Cyprus freezes crypto applications ahead of EU-wide MiCA transition

October 17, 2024 Coin Telegraph

CASP

The CySEC has warned crypto asset service providers of coming changes as the continent braces for MiCA.

The European Union will transition from national laws on crypto asset service providers (CASPs) to common Markets in Crypto-Assets (MiCA) regulations by Dec. 30. The Cyprus Securities and Exchange Commission (CySEC) is providing an example of that transition as it freezes CASP applications and warns market participants of changes to come.

The CySEC will no longer accept CASP applications under Cypriote national laws as of Oct. 17, the day of the announcement. CASPs that succeed in registering under the national laws before the Dec. 30 deadline will be able to operate under that jurisdiction until July 1, 2026, unless they are granted or refused authorization under MiCA Article 63 before then.

CASPs will be subject to the European Commission’s Regulatory Technical Standards and the Implementing Technical Standards once MiCA regulations kick in. Those standards have not been published yet, but the CySEC advised interested parties to refer to the Draft Technical Standards issued by the European Securities and Markets Authority (ESMA) in the meantime.

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AML

The Ministry of Finance intends to amend the existing Prevention and Suppression of Money Laundering Law.

One of the friendliest European jurisdictions to crypto, Cyprus, might bring its industry regulation to tighter standards. According to an Oct. 10 report by the Cyprus Mail, the local Ministry of Finance intends to amend the existing Prevention and Suppression of Money Laundering Law.

The ministry has presented its amendments package to the Parliamentary Committee on Legal Affairs. It seeks to align Cyprus with international standards for anti-money laundering and combating the financing of terrorism (AML/CFT) set by the Financial Action Task Force (FATF), as well as the recommendations of the MONEYVAL report published in November 2022.

Under the amendments, every service provider working with crypto assets must register with the financial regulator, the Cyprus Securities and Exchange Commission (CySEC). In case of non-compliance, the penalties will vary from fines of up to €350,000 to imprisonment of up to five years or a combination of both.

The amendments reportedly met some reservations from the Cyprus Bar Association, especially regarding the obligation for crypto service providers with acting licenses from other European countries to still register with the CySEC. Such provision was included in the amendments by the CySEC itself.

Cointelegraph reached out to the Ministry of Finance for further details, but did not receive an immediate response.

Crypto companies reported no significant problems registering their business in Cyprus. In September, crypto-friendly brokerage firm eToro received a Crypto Asset Service Provider (CASP) registration from the CySEC, following ByBit, which received the same license in June.

However, the world’s largest crypto exchange, Binance, operating under a heightening regulatory pressure in recent months, decided to deregister from the Cyprus market in July. The company said it wanted to focus on larger registered EU markets.

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eToro secures crypto registration in Cyprus to expand in EU

September 21, 2023 Coin Telegraph

Coin Telegraph

According to eToro deputy CEO Hedva Ber, Europe is “hugely important” for the firm as the majority of eToro users are based in the region.

Cryptocurrency-friendly brokerage firm eToro is expanding its crypto services worldwide after securing new regulatory approval in Europe.

EToro has received a Crypto Asset Service Provider (CASP) registration from the Cyprus Securities and Exchange Commission (CySEC), the firm officially announced on Sept. 21.

According to eToro, the registration will authorize it to offer regulated crypto services to all countries in the European Union from one single entity known as eToro Europe Digital Assets. The registration will specifically come into effect once the EU’s Markets in Crypto-Assets Regulation (MiCA) is enforced in December 2024.

According to eToro deputy CEO Hedva Ber, the registration shows that eToro is “100% ready to embrace a new era for crypto once MiCA comes into effect next year.” The exec pointed out that Europe is “hugely important” for eToro as the majority of its users are based in the region.

Some other major crypto firms, such as Bybit exchange, have also been expanding their presence in the EU by obtaining the CySEC registration. On the other hand, Binance applied to deregister in Cyprus in June, claiming that it wanted to focus on “larger markets.”

EToro’s recent crypto approval in Cyprus follows a similar regulatory milestone in Spain. In July 2023, the Bank of Spain approved the registration of eToro as a service provider of exchange of virtual currency for fiat currency and electronic wallet custody services. Previously, eToro also secured a digital asset service provider registration from the French financial regulator, the Autorité des Marchés Financiers.

A major social trading and multi-asset investment firm, eToro made headlines in April 2023 by partnering with Elon Musk’s X (formerly Twitter) to help the social media platform launch crypto and stock trading.

The firm also faced some issues in Australia earlier this year, with the Australian Securities and Investments Commission suing eToro over “volatile” trading products in August.

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Crypto adoption in Cyprus beefed up by ByBit license approval

June 26, 2023 Coin Telegraph

Binance

Following Binance’s departure from Cyprus, ByBit strengthens the island’s crypto ecosystem after acquiring an operating license.

Crypto exchange Bybit revealed it has acquired a license to operate as an exchange and custody service in Cyprus. The world’s third most visited crypto exchange will begin offering trading between crypto and fiat currency pairs, and crypto-related financial services.

Cyprus is the third most populous island in the Mediterranean Sea, with a population of 1.2 million people. In a press release, Ben Zhou, the co-founder and CEO of Bybit, explained the importance of expanding the group’s global presence, highlighting the role of crypto as a way of opting out of the legacy financial system:

“We are excited to introduce the Crypto Ark to Cyprus.“

Cyprus is increasingly a crypto hotspot in the Mediterranean, in some parts driven by actions from the public sector. In 2022, Kyriacos Kokkinos, Republic then Cyprus Deputy Minister to the President for Research, explained that the country would become a hub for new disruptive technologies, including blockchain.

Historically, the Cypriot central bank warned against crypto; while a decade has passed since a run on Cypriot banks induced a 600% price increase for Bitcoin (BTC). In 2023, Cyprus expressed its intentions to adopt blockchain technologies, sharing the Distributed Ledger Technology Bill in 2021.

Nonetheless, adoption levels pale compared to those observed on the island of Malta, also situated in the Mediterranean Sea. Malta offers three times as many blockchain-related jobs per capita and is commonly referred to as “Blockchain Island,” while Bitcoin OGs, including Adam Back, speak highly of the crypto environment in Malta.

Furthermore, crypto industry behemoth Binance recently announced it would deregister in Cyprus. Initially headquartered in China, Binance now hosts offices worldwide and in crypto-friendly hotspots such as Dubai and Bahrain, and has besmirched Cyprus to focus on larger markets worldwide.

ByBit recognizes the “Immense potential of the Cyprus market,” while the newly approved license will make a contribution to the local cryptocurrency ecosystem.

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Binance Gears Up To Leave Cyprus Ahead of New EU Regulation To Focus On Other Markets: Report

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Binance applies to deregister in Cyprus, says focus is on ‘larger markets’

June 14, 2023 Coin Telegraph

Binance

The Cyprus SEC lists the exchange as “under examination for application for deregistration” on the island.

Binance appears to be preparing to exit Cyprus. The Cyprus Securities and Exchange Commission has marked Binance Cyprus Limited as “Under examination for application for deregistration” on its website.

Previously, the cryptocurrency exchange received Class 3 registration as a Crypto Asset Services Provider (CASP) in Cyprus in October. At that time, Binance called the registration “another milestone in Binance’s regulatory efforts in Europe and follows similar registrations for Binance’s local entities in France, Italy and Spain.”

Class 3 is the highest level of service provision in the island nation and allows the exchange to custody crypto assets, provide staking, manage portfolios and perform a number of other functions in addition to providing a trading platform. Despite this, Reuters reported, citing an unnamed source at the regulator, that Binance never launched its services in Cyprus.

A Binance spokesperson told Cointelegraph:

"We are working hard to prepare our business to be fully compliant with MiCA when it is implemented in the next 18 months. To that end, we have made the decision to pull back efforts in Cyprus to focus on our efforts on fewer regulated entities in the EU, especially our larger registered markets."

The Cypriote regulator lists nine registered CASPs on its website, including Binance. Among the other listings are eToro and a Revolut entity. Other exchanges, such as Crypto.com and Gemini, are reportedly receiving registration in Cyprus, however.

The crypto industry is preparing for European Union (EU) Markets in Crypto-Assets (MiCA) legislation to enter into force next year. Since Cyprus is an EU member, MiCA rules will thereby allow Binance to “passport” its registration from other European regulators throughout the countries subject to the new legislation.

BINANCE'S CYPRUS UNIT HAS APPLIED TO DEREGISTER AS CRYPTO ASSET SERVICE PROVIDER IN CYPRUS - SECURITIES REGULATOR WEBSITE
— *Walter Bloomberg (@DeItaone) June 14, 2023

Binance, Binance.US and Binance CEO Changpeng Zhao were sued by the United States Securities and Exchange Commission (SEC) on June 5 for 13 charges that included unregistered securities sales and failure to register as a securities exchange.

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CySEC requested FTX’s European arm suspend operations prior to bankruptcy: Report

November 11, 2022 Coin Telegraph

Coin Telegraph

FTX Europe was one of roughly 130 companies in FTX Group which will be a part of bankruptcy proceedings in the United States.

The Securities and Exchange Commission of Cyprus, or CySEC, reportedly issued a statement amid FTX filing for Chapter 11 bankruptcy in the United States that the regulator requested the exchange halt operations for its Europe arm.

According to a Nov. 11 Reuters report, the CySEC said it had asked FTX Europe to “suspend its operations and to proceed immediately with a number of actions for the protection of the investors” on Nov. 9. It’s unclear why the financial regulator chose to reiterate its call to the crypto exchange, given FTX Europe was one of roughly 130 companies in FTX Group which will be filing for bankruptcy.

CySEC approved the FTX arm to operate in the island nation from its regional headquarters in March, with its European headquarters based in Switzerland. Amid FTX’s liquidity issues, global financial policymakers have responded with suggestions for additional regulations on crypto firms, as well as freezing assets with the exchange’s local businesses, as was the case in the Bahamas.

FTX CEO Sam Bankman-Fried said on Nov. 11 he would be working on “giving clarity on where things are in terms of user recovery” as soon as possible. He resigned amid bankruptcy proceedings, with John Ray taking over as CEO.

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