Tuesday, November 28, 2023

Crypto enterprises that operate within Cyprus without proper registration may soon face significant fines, potentially reaching up to $350,000, while individuals responsible for such enterprises could potentially be subject to imprisonment for a maximum of five years. These measures are part of a proposal set forth by the Finance Ministry, recently submitted to the parliament, with the aim of harmonizing the nation’s regulations with the standards outlined by the Financial Action Task Force (FATF).

The Draft Under Scrutiny by the Parliamentary Committee on Legal Affairs

Reports suggest that Cypriot authorities are considering imposing substantial penalties on crypto enterprises that neglect to register with the appropriate regulatory authorities. Infringing crypto entities may be liable for fines as high as $350,000, and those behind these entities could potentially face a maximum incarceration period of five years.

According to an article in the Cyprus Mail, this proposal to enhance penalties for non-compliant crypto entities was included in a legal amendment submitted by the Finance Ministry to the Parliamentary Committee on Legal Affairs. This submitted draft proposes an amendment to Cyprus’ Prevention and Suppression of Money Laundering Law.

The proposed amendment not only aims to align Cyprus’ legal framework with the stringent standards established by the FATF but also with the recommendations provided by the Council of Europe’s Committee of Experts on Money Laundering and Terrorist Financing (MONEYVAL) report.

For crypto enterprises operating in Cyprus, compliance with these proposed measures will necessitate registration with the Cyprus Securities and Exchange Commission (CSEC). This requirement extends to enterprises already licensed by other European Union (EU) member states and those awaiting licensure.

In preparation for the draft submission, the Finance Ministry sought the opinion of the Cyprus Bar Association. While the association recommended the inclusion of FATF’s travel rule in the legislation, it expressed reservations regarding a mandate that would require crypto entities already registered elsewhere in the EU to additionally register in Cyprus.

Concurrently, the CSEC is exploring the possibility of issuing guidelines to bolster its oversight of the crypto sector.

Share your insights on this development in the comments section below.

Frequently Asked Questions (FAQs) about Cyprus Crypto Regulations

What are the proposed penalties for unregistered crypto firms in Cyprus?

Crypto firms operating in Cyprus without registration may face fines of up to $350,000, and individuals behind such firms could be sentenced to a maximum of five years in jail.

Why is Cyprus proposing these penalties?

Cyprus aims to align its laws with international standards set by the Financial Action Task Force (FATF) and the recommendations of the Council of Europe’s Committee of Experts on Money Laundering and Terrorist Financing (MONEYVAL) report.

What steps must crypto entities take to avoid penalties?

Crypto entities in Cyprus must register with the Cyprus Securities and Exchange Commission (CSEC), including those already licensed by other EU states.

What was the opinion of the Cyprus Bar Association on these proposals?

The Cyprus Bar Association recommended incorporating FATF’s travel rule but expressed reservations about requiring crypto entities registered elsewhere in the EU to additionally register in Cyprus.

Is there any effort to enhance oversight of the crypto sector?

Yes, the CSEC is considering issuing guidelines to strengthen its oversight of the crypto sector.

More about Cyprus Crypto Regulations


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EconGuru_22 October 12, 2023 - 10:39 pm

alignin’ wit FATF & MONEYVAL sounds imp. global standrds n all.

CryptoEnthusiastX October 13, 2023 - 12:22 am

CSEC makin’ moves too. Guidelines, oversight, _xD83D__xDC4D_. But Cyprus Bar Assn not so sure. _xD83D__xDCAD_

NewsJunkie2023 October 13, 2023 - 2:07 am

Need more info on impact tho. How many crypto firms affected? #RegulationsDebate

CryptoFan123 October 13, 2023 - 8:09 am

wow, Cyprus gettin’ serious bout crypto fines! 350K dollrs? 5yrs jail? thats harsh! _xD83D__xDE32_


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