Cyprus financial regulator issues new guidance for crypto trading

TL:DR Breakdown:

  • CySEC recently published a guide for crypto trading in the country.
  • The regulator wants investment platforms to maintain a risk-mitigated environment for crypto-assets trading.

In a recent publication, the financial regulator of the Republic of Cyprus, CySEC, or the Cyprus Securities and Exchange Commission, informed about the issuance of new cryptocurrency regulation in Circular C417. More like guidance, the rule is aimed at helping Cyprus Investment Firms (CIFs) manage and conduct digital currency trading in a risk-mitigated manner. This is reportedly the first crypto regulatory guide from the regulator.

CIFs can conduct crypto trades

Among other things, the regulator urged the companies that facilitate crypto-assets trading to review their risk management strategies to ensure traders will be protected from any risk associated with the cryptocurrencies. CySEC emphasized more the need to adopt adequate security measures against cybersecurity, reputational, and operational risk, following the nature of digital currencies.

The regulator also wants Cyprus investment companies to disclose information about the crypto-assets they hold. This includes the amounts of different crypto-asset exposures, the accounting treatment, and capital requirements for such exposures. While commenting on the development, a Cyprus lawyer Dimitris Papoutsis opined said regulation was a good first step for Cyprus.

“The Circular addresses much-needed direction so that CIFs can invest in cryptocurrency and be assured of compliance,” Papoutsis said, adding that they can expect more regulation of digital currencies in the country “under the rubric of Anti-Money Laundering legislation in due course.”

Cyprus blockchain economy

While the authorities are working to regulate cryptocurrency trading in the country, the country already showed interest in adopting blockchain, the technology behind digital currencies. Last year, Cryptopolitan reported that the authorities mentioned plans in the National Strategy to implement the technology to further boost their transition to a digital economy.

News Source

Source: https://elevenews.com/2020/12/02/cyprus-financial-regulator-issues-new-guidance-for-crypto-trading/

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