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Cyprus to tighten crypto regulations in accordance with FATF

The Cointelegraph ​

Cryptocoins News / The Cointelegraph ​ 135 Views

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

The ministry has presented its amendments package to the House of Representatives Standing Committee on Legal Affairs, Justice and Public Order. 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 Committee of Experts on the Evaluation of Anti-money Laundering Measures and the Financing of Terrorism (MONEYVAL) report published in November 2022.

Related: Crypto adoption in Cyprus beefed up by Bybit license approval

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 noncompliance, the penalties will vary from fines of up to €350,000 ($370,000) to imprisonment of up to five years or a combination of both.

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

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

Crypto companies have reported no significant problems registering in Cyprus. In September, crypto-friendly brokerage firm eToro received a crypto asset service provider registration from the CySEC, following Bybit, which received the same license in June.

However, the world’s largest crypto exchange, Binance, operating under 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 European Union markets.

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