In the rapidly evolving cryptocurrency landscape, investors’ safety should be a priority, as there are several exploitations, scams, and frauds continuously increasing. This happening because the crypto industry has a lack of regulation.
Hefty penalties for unregistered Crypto businesses
Recently, the Republic of Cyprus is planning to impose a hefty penalty against unregistered Crypto Assets Services Providers who are operating throughout the country. This step comes in response to the country’s proposed changes in its money laundering law. The Ministry of Finance is behind this major step as he suggested and also considered by the Parliament Committee on Legal Affairs.
According to the report by local media, the Cyprus authorities might penalize the unlicensed crypto services provider and also impose €350,000 or five years in jail, or both.
EU influence and international standards
This legislation amendment is based on the penalties imposed by EU member states on non-compliant and unregistered crypto services providers. This amendment also follows recommendations and directives from the Financial Action Task Force (FATF) and MONEYVAL report which was published in November 2022.
Mandatory registration with the Cyprus Security and Exchange Commission
This proposed amendment mandates all crypto asset services providers to register themselves with the Cyprus Security and Exchange Commission, before offering or operating their services in the country. This significant step is taken to safeguard the country’s investors and also to reduce the risk of uncertainty in the country.
Furthermore, the Cyprus Bar Association has also made a suggestion on the law that also focuses on other crypto services providers from EU countries also need to register with Cyprus regulations.