Crypto Asset Service Provider

The Cyprus Crypto Asset Service Provider (CASP) registry appears to be so interesting since a number of applicants have already initiated the procedure with the Cyprus Security & Exchange Commission to obtain a CASP license.

Learn more about CASP obligations and licensing requirements
In anticipation of the implementation and adoption of the new Markets in Crypto-Assets (MiCA) regulation proposal by the EU, CySEC as the Cyprus regulator of this industry has not imposed any supervisory regulatory requirement yet, since the current Anti-Money Laundering Directive seems to be enough in terms of compliance requirements, which seems to provide reassurance to existing CASP’s and/ or new applicants looking to enter the market.

The proposal of the MiCA regulation aims to establish sweeping common rules for the regulation of blockchain fintech applications across the EU, and render EU financial services rules fit for the digital age. If implemented, MiCA will position the EU at the forefront of blockchain innovation.

The objectives of MiCA are:
i. To provide legal certainty for crypto-assets not covered by existing EU financial services legislation;
ii. To establish uniform rules for crypto-asset service providers and issuers at an EU level; and
iii. To establish specific rules for the so-called ‘stablecoins’, including when these are e-money.

MiCA will be limited to crypto-assets that do not qualify as financial instruments, deposits or structured deposits under EU financial services legislation and will be focused on:
i. asset-referenced tokens;
ii. e-money tokens; and
iii. other crypto-assets. (In addition, it regulates asset-referenced token issuers, e-money token issuers, and crypto-asset service providers.)

A Cyprus CASP licence will cover the following crypto-business models and cases:
i. Cryptocurrency exchanges
ii. Crypto Wallet businesses and anyone that provides management, administration, transmission, transfer, retention, custodianship and safekeeping of crypto-assets or cryptographic keys or means which allow for the exercise of control in crypto-assets.
iii. All initial offerings (ICO, IEO, IDO), offerings and/or sale of crypto-assets as well as participation and/or provision of financial services related to the distribution, offering and/or sale of crypto-assets.

It is worth mentioning that in the case of a CASP which is already established within the EEA and registered with the respective AML/CFT national supervisor must submit a notification to CySEC, and provide evidence in relation to their valid registration for each service or activity.

Crypto-asset activities and initial capital table.

CASP Class Type of Crypto-Asset Activity Initial Capital
Class 1 CASP that provides investment advice. Euro 50.000
Class 2

CASPs providing the service referred to in Class 1 and/or any of the following services:

• 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.

Euro 125.000
Class 3

CASPs that provide any of the services referred to in Class 1 or 2 and/or:

• 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.

Euro 150.000