Cyprus Finance Ministry recommends 'capacity building' for crypto

Cyprus is set to regulate the cryptocurrency industry, with the country’s finance ministry releasing a national crypto risk assessment. ...



Cyprus is set to regulate the cryptocurrency industry, with the country’s finance ministry releasing a national crypto risk assessment.

Posted December 13, official documentation provides a risk assessment for the Republic of Cyprus regarding money laundering risks associated with virtual asset activities and virtual asset service providers (VASPs).

The Cyprus Ministry of Finance stressed that there is “limited understanding or direct experience” regarding the risks of money laundering associated with crypto in the country.

However, authorities such as the Cyprus Securities and Exchange Commission (CySEC) and local law enforcement authorities have demonstrated a “sophisticated level of understanding of the industry,” the statement noted. The authorities should further explore the market and receive “extensive training on these issues” to improve their skills, the ministry said.

The ministry also recommended that local financial firms “adopt written policies and procedures to comply” with the wire transfer rule for virtual currencies. In the meantime, authorities are expected to start storing and sharing data specific to virtual currencies and VASPs, the ministry said, adding:

“Although activity levels are now considered negligible, this will allow an evidence-based baseline as activity increases, promoting earlier detection of risks or changes in risk levels. “

The authority noted that Cyprus should actively collaborate with other jurisdictions experienced in the crypto industry in order to learn from these relationships and identify best practices.

“Such international cooperation could be an important channel for Cyprus to strengthen and accelerate its capacity building for the VA / VASP sector,” the ministry wrote.

Related: Israel reportedly adopted new AML rules for crypto

One of the most uncertain countries in the world in terms of cryptocurrency regulations, Cyprus has decided to adopt regulations related to cryptocurrencies this year. In September, CySEC would have disclosed new details on crypto regulatory policies, planning to increase cryptocurrencies by incorporating European Union anti-money laundering rules into Cypriot laws.

The Cypriot crypto ecosystem is associated with significant uncertainty as some major financial institutions, including the Bank of Cyprus, have reportedly been blocking Bitcoin (BTC) related transactions this year, according to reports on social networks.