Crypto exchange, crypto asset service provider, crypto consulting licencing in Cyprus in 2021 - The recent updates and key elements to take into consideration when applying for Cyprus crypto licence.
Crypto Licensing In Cyprus 2022 Updates
Crypto exchange, crypto asset service provider, crypto consulting licencing in Cyprus in 2021 - The recent updates and key elements to take into consideration when applying for Cyprus crypto licence.
Crypto exchanges or as they are classified in Cyprus - Crypto Asset Service Providers are companies regulated under the laws of Cyprus that provide crypto related services. In order to lawfully provide crypto related services, it is required to acquire a licence for your business activities.
Cyprus offers great possibilities for companies to acquire an European Union recognized and reputable crypto service provider licence, which will enable the company to legally provide crypto related services.
Cyprus regulator - the Cyprus Securities and Exchange Commission (CySEC) has present companies with the possibility to acquire a licence in 3 different crypto assets service areas (classes).
Class 1 - Crypto Asset Service Providers that provide crypto investment advice, and the initial capital requirement is €50'000
Class 2 - Crypto Asset Service Providers offering the support alluded to in Class 1 as well as any of the accompanying administrations:
- gathering and transmission of customer orders
- execution of orders in the interest of customers
- trade between crypto-resources and fiat money
- trade between crypto-resources
- interest as well as arrangement of monetary administrations identified with the appropriation, offering and additionally offer of crypto-resources, including the underlying contribution
- position of crypto-resources without solid responsibility
- portfolio the executives.
Minimum capital requirement for Class 2 Crypto Asset Service Provider in Cyprus is €125'000.
Class 3 - Crypto Asset Service Providers that give any of the administrations alluded to in Class 1 or 2 or potentially:
- organization, move of possession, move of site, holding, or potentially care, including authority, of crypto-resources or cryptographic keys or means empowering command over crypto-resources
- endorsing and additionally situation of crypto-resources with strong responsibility
- activity of a multilateral framework, which unites various third parties purchasing and selling interests in crypto-resources such that outcomes in an exchange.
Minimum capital requirement for Class 3 Crypto Asset Service Provider in Cyprus is €150'000.
Operation Requirements of Crypto Asset Service Providers in Cyprus
New organizations should enroll with CySEC prior to beginning their activities in or from Cyprus.
Existing organizations that show a material existing crypto-resource movement should present an application before the end of October 2021 and be completely consistent with the AML/CFT Law and the Directives gave according to the AML/CFT Law.
They key requirements for the companies applying for Cyprus crypto exchange licence are the following:
- The fitness and probity of the Crypto Asset Service Providers beneficiaries and persons holding a management position;
- 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.
Crypto Asset Service Providers Licence Requirements in Cyprus
The prequisites for the applicant in order to apply and successfully be approved by CySEC, as a licensed crypto-asset service provider in Cyprus must fulfil the below conditions:
- Incorporate a legal company in Cyprus.
- The company must appoint two executive and two non-executive directors and the majority of them (3 out 4) must be tax residents of Cyprus.
- The directors must be approved by CySEC upon assessment of their knowledge and experience in the field and must be evaluated whether they satisfy the "fit and proper" test;
- Satisfy the legal substance requirement: A fully operational office must be established within Cyprus and local staff will need to be hired on a full-time basis in order to satisfy the key functions of the company;
- Present adequate policies and procedures in compliance with the Law and Directive for the Prevention and Suppression of Money Laundering and Terrorist Financing;
- Present adequate internal control mechanisms for the smooth operation and functioning of the company;
- Prepare governance arrangements, are in place, with reference lines that are transparent and are clearly identified and defined.
How to Register as Crypto Asset Service Provider in Cyprus?
The first step to acquiring the Crypto Asset Service Provider Licence in Cyprus is to fulfill the conditions above, namely, first to establish a local company, appoint the required amount of directors, prepare an office space, draft the legal documents required and then to apply for the licence.
The Cyprus Securities and Exchange Commission require that special application forms are prepared and submitted together with the supporting documentation which proves the substance of the company operations.
The Cyprus Securities and Exchange Commissionhas also placed a €10.000 fee for the review of the application. Accepted candidates won't be needed to pay an extra expense for the main year of their enrollment. In case application is not sucessful, the Cyprus Securities and Exchange Commission does not refund the money.
Annual fee for the maintenance of the licecence is €5000.00.
How EU LAW FIRM can help you with Crypto Asset Service Provider Licence in Cyprus?
We will assist you in all the preparation works(establishment of Cyprus company, necessary document preparation) and application filing in order to ensure sucessful Crypto Asset Service Provider Licence in Cyprus.
As the preparation of applications for the crypto asset service provider require professional touch, it will be required to appoint a crypto licencing specialist which will prepare all the required forms and necessary preparation works in order for the company to sucessfuly acquire the licence.
EU LAW FIRM has multiple years experience of Crypto licencing not only in Cyprus but also in other jurisdictions, as well as, our lawyers and consultants are highly aware of the crypto market and the highly complex operating matters.
In case you have decided to register a Crypto Exchange in Cyprus or Crypto Asset Service Provider Licence in Cyprus do not hesitate to contact us and we will guide you through the necessary steps and assist with your licencing requirements.
Contact Information:
Do not hesitate to contact us via e-mail at info@eulawfirm.eu, telephone: +371 26742086 or use the direct contact form available on our website.
