The Cyprus Securities and Exchange Commission (CySEC) has published a clarification on the anti-money laundering and counter-terrorist financing (AML/CFT) supervision for cryptoasset operations undertaken in or from Cyprus. The Successful Business Magazine presents the summary of this publication.
REGISTER OR SUBMIT NOTIFICATION?
If you are 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, you must formally register with CySEC.
If you are a 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 Cypriot residents, including incorporated or unincorporated entities based in Cyprus), you must submit a notification. You should provide evidence in relation to your valid registration for each service or activity.
Where these services or activities are not covered by the framework that governs your registration for AML/CFT purposes, you should submit an application to be registered as a CASP with CySEC.
REGISTER BEFORE STARTING BUSINESS
New businesses must register with CySEC before commencing their operations in or from Cyprus. Existing businesses that demonstrate a material existing crypto-asset activity had 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.
REGULATORY FRAMEWORK
The applicable regulatory framework comprises:
• The AML/CFT Law • The CySEC Directive for the CASP register
• The CySEC directive for the prevention and suppression of money laundering and terrorist financing. The regulatory framework includes rules, inter alia, in relation to:
• The fitness and probity of the CASP beneficiaries and persons holding a management
position
• The conditions in relation to CASPs registration
• The organisational and operational requirements
• Preforming Know Your Client and other client due diligence measures
• Drawing the economic profile of clients
• Identifying the source of client funds
• Monitoring the clients’ transactions
• Identifying and reporting suspicious transactions
• Undertaking a comprehensive risk assessment in relation to clients’ activities and take proportionate measures per client, activity and crypto-asset in question.
CySEC’s approach on CASPs and their operations is further elaborated in the Policy Statement PS-01-2021.
HOW TO REGISTER
CASPs that provide services in or from Cyprus must submit a duly completed application form, along with relevant questionnaires and any additional information and/or required evidence, in accordance with CySEC’s Announcements on the submission of applications and relevant correspondence, as amended from time to time and pay the corresponding fee. In addition to this, an electronic version of the application form (i.e. only Form 188-01) should be also submitted at [email protected].
CASPs established in the EEA that are 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, must submit a notification form at [email protected].
REGISTRATION FEES
CySEC registration charges are as follows:
• €10,000 for the examination of an application. Successful applicants will not be required to pay an additional fee for the first year of their registration.
• €5,000 for the purposes of renewal of registration per year.
CRYPTO-ASSET ACTIVITIES AND INITIAL CAPITAL
