CySEC released a newly drafted policy on crypto-asset service providers (CASPs). The Cyprus Securities and Exchange Commission published this on Monday, and it will cover the specific operations of CASPs, as well as the registration process.
The policy highlighted that crypto assets will either qualify as Electronic Money under the Electronic Money Law or as financial instruments under the Investment Services and Activities and Regulated Markets Law. The end qualification depends on the nature of the business.
Moreover, the policy also revealed that the crypto-based assets can be a digital rep of a value not issued by a central bank, nor by any public authority.
The new framework will force businesses to cooperate with the latest AML and CFT rules. Some major obligations include:
- operational requirements
- organizational requirements
- measures in due diligence
- economic profiling of customers
- organizations of funds and their original source
CySEC pushes a distributed ledger technology (DLT) to the mainstream with this new move. Nevertheless, the Cypriot regulator pointed out the clear risks such as tech adoption and standardization, governance predicaments, scalability, abiding by existing regulations, and more.
CySEC has taken the same routes as the regulators in Malta and Gibrlatar, two nations that try to create public attention in crypto businesses by giving them status.