Following the recent pan-EU implementation and subsequent transposition of the AMLD V into Cyprus Law which, among others, brought into scope the crypto-asset service providers (“CASPs”), offering services related to crypto-assets, the Cyprus Securities and Exchange Commission, updated its definition of obliged entities under the Prevention and Suppression of Money Laundering Law 2007 and issued on the 25th of June, 2021, a Directive (in Greek only) in regards to the registration and operating conditions of providers of services related to crypto assets.
The Directive, covers amongst others, the following Key topics:
A) The Register of CASPs
The Cypriot Securities and Exchange Commission will publish on its website the CASPs Register, which will be accessible by the public. The Key Information contained therein will include:
The name, trade name, legal form and the LEI “legal entity identifier” of the CASPs;
The physical address of the CASPs;
The Services and/or activities offered by the CASPs; and
The website address of the CASP.
B) Submitting an application for registration in the Register of CASPs
The application will be published by the CySEC, in due course, and the applicant will have to input all the details mentioned in (A) above.
The applicant will be contacted within 6 months regarding his/her registration or not, to the CASP Register.
As soon as the application for the purpose of registration is officially approved, the applicant will be registered in the register by the CySEC on an immediate basis
C) Prerequisites for Registration to the Register
The application for the registration in the register will only be approved by CySEC if the applicant is successful in fulfilling, amongst others, the conditions mentioned below:
Individuals occupying an administrative post are highly competent and honest, have a positive image and reputation, possess good skills, knowledge, and have a considerable amount of experience, and are willing to dedicate an adequate amount of time performing the assigned tasks.
The Board of Directors of the applicant must consist of at least 4 persons, of which 2 must manage the business activities of the CASP and 2 must be independent members.
When conducting business online, maintains a website owned and used exclusively by the applicant who will operate it.
The applicant has established appropriate policies and procedures to ensure its compliance with the CySEC Law and AML Law.
Has sound administrative and accounting procedures, internal control mechanisms, effective risk assessment procedures and effective control and security mechanisms for electronic data processing systems;
Ensures that records are kept in relation to all the functions it performs, which also include the relevant communication, in such a way as to enable the CySEC to exercise its supervisory duties and to take actions to ensure compliance with the obligations of the PYKS with all its obligations;
It has appropriate policies and procedures in place to ensure that its customers' grievances are properly resolved;
Ensures that the persons employed in the CASP possess the professionalism and the appropriate knowledge according to the tasks assigned to them.
D) Capital Requirements
The CASP must always maintain at least equal capital at any time, which must be equal to the greatest of the following amounts:
A) the amount of the initial capital of the Annex, as appropriately correspond to its functions and activities,
B) one quarter (1/4) of the fixed expenses of the CASP during the previous year, reviewed annually.
The provisions in point b) shall enter into force on the 1st of January 2022 as follows:
30% of the relevant amount from the 1st January 2022;
60% of the relevant amount from the 1st January 2023;
100% of the relevant amount from the 1st January 2024.
E) CySEC Fees and Subscriptions
For the purposes of examining the application for registration in the CASPs Register, the applicant pays to CySEC a fee of 10,000 EUR.
If the application for registration in the CASPs Register is approved by the CySEC, the CASP does not pay any fee or subscription to the Commission for the first year of its registration in the PYKS Register.
For the purposes of renewal of registration in the PYKS Register for a period of one (1) year, the CASP pays a subscription of 5,000 EUR.
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Written by Christos Eleftheriou, Junior Compliance Associate at FAI Comply