Cyprus: Register of crypto-asset service providers
Crypto-assets or crypto-currencies, is a type of electronic cash which can be used for payments between users via secure, cryptographic, blockchain technology. Such technology is used to record the owners of the crypto-assets, and for effecting payments between the users of the blockchain technology. The crypto - assets only exist electronically and use a peer-to-peer system. There is no governmental supervision of the crypto – assets, nor, their providers or issuers. Crypto-assets and legal framework in Cyprus The definition of crypto-assets is included in the Prevention and Suppression of Money Laundering and Terrorist Financing Law of 2007 – Law 118 (I)/2007, as amended (the ‘’AML Law’’). According to the AML Law, crypto-asset is a digital depiction of a value not issued by a central bank or public authority and therefore does not carry any warranties from such. Furthermore, it is not necessarily connected with a legal currency, nor is it regulated by legal frameworks applicable to currency or money. It is, nevertheless, considered as a transaction mean or investment and as such, it may be transferred, stored or moved electronically. It is not however:- (fiat currency), or
- electronic money, or
- financial – monetary instrument
- Exchange between crypto-assets and other currencies;
- exchange between crypto-assets;
- management, transfer, safekeeping, transmission, keeping including by trust, of crypto-assets or crypto keys or means, which, allow the exercise of control on crypto-assets;
- offer and/or sale of crypto-assets including the original offer; and
- participation in, and/or provision of, financial – monetary services regarding the distribution, offer and/or sale of crypto-assets, including the original offer.
- The conditions in relation to the Crypto Assets Services Provider registration;
- Organisational and operational requirements;
- The performance of Know Your Client and other client due diligence measures;
- The drawing of the economic profile of clients;
- Identification of 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.
- reception and transmission of client orders;
- execution of orders on behalf of clients;
- exchange between crypto-assets and fiat currency;
- exchange between crypto-assets;
- participation and/or provision of financial services related to the distribution, offering and/or sale of crypto-assets, including the initial offering;
- placement of crypto-assets without firm commitment;
- portfolio management.
- administration, transfer of ownership, transfer of site, holding, and/or safekeeping, including custody, of crypto-assets or cryptographic keys or means enabling control over crypto-assets;
- underwriting and/or placement of crypto-assets with firm commitment;
- operation of a multilateral system, which brings together multiple third-party buying and selling interests in crypto-assets in a way that results in a transaction.