Cyprus Law and Cryptocurrency
Cryptocurrencies are digital assets that can be used as a medium of exchange. They have become increasingly popular in recent years, particularly for international transactions. As with any form of currency or financial instrument, cryptocurrency is subject to the laws and regulations of the jurisdiction in which it is held or exchanged. This article will explore how Cyprus law applies to cryptocurrencies.
The Republic of Cyprus has long been known for its business-friendly regulatory environment and its willingness to embrace innovative technologies such as blockchain technology and cryptocurrencies. In 2017, the government introduced legislation regulating virtual currencies (including those based on blockchains) under ‘Law 87(I)/2017’ – more commonly referred to as “the Virtual Currency Act”. The purpose behind this was twofold: firstly, to provide legal certainty around these emerging asset classes; secondly, to ensure they were treated fairly by regulators while providing sufficient consumer protection measures where necessary.
Under this new legislation, businesses that conduct activities involving virtual currencies must apply for a license from CySEC – the Cyprus Securities & Exchange Commission – before starting operations within the country’s borders; failure do so may result in sanctions such as fines or even prosecution depending on severity of noncompliance issues found during inspection visits carried out by authorities throughout each year following initial registration process completion . Additionally , all companies offering services related directly pertaining crypto-assets must also possess adequate insurance coverage covering potential losses incurred due unexpected technical/software malfunctioning events .
It should also be noted that under current law , gains made from trading / holding virtual currency investments are not considered taxable income at present ; however taxation rules may change over time if deemed appropriate after assessing various economic factors .. Furthermore , all transfers exceeding €15 thousand euros require reporting through local Tax Authority unit regardless whether domestic party involved only or foreign third parties included into transaction flow too since anti money laundering policies need enforcement regularly without fail .
All things considered , it appears clear that despite still being relatively young industry sector overall when compared against other traditional investment vehicles like stocks bonds etc., lawmakers have taken steps towards creating fair balanced ecosystem governing exchanges market participants alike designed promote healthy growth whilst protecting investors interests both now future generations come visit same space potentially enjoy rewards offered therein just same way we currently doing here today !
