CySEC CASP LICENSING & COMPLIANCE

Process

Following the transposition of the AMLD V into Cyprus Law which, brings into scope the crypto-asset service providers (“CASPs”), the CySEC, updated its definition of obliged entities under the Prevention and Suppression of Money Laundering Law 2007 and issued on the 25th of June, 2021, in regards to the registration and operating conditions of providers of services related to crypto assets.

Company Incorporation

In order to Apply to CySEC to become an Investment Firm, a Company must be incorporated and have an LEI.

Preparation of the Application File

Questionnaires and supporting documents are prepared in order to submit to CySEC.

Submission of Application file to CySEC

Once the Application file is completed it is duly submitted to the CySEC with the applicable CySEC Fees.

Correspondence with the CySEC with regards to the Application File

A CySEC officer is appointed and then there are usually 2-4 rounds of questions from CySEC requesting clarification or further evidence with regards to the Application.

Conditional Approval

Following the rounds of Questioning a conditional approval is provided by the CySEC, which once the Comapny meets the Conditions it submits proof of such to CySEC to proceed to next steps.

CySEC Activation Visit

Following meeting the Conditions of the Approval CySEC visits the offices to confirm substance and that the Company will run in line with Application.

CySEC Approval

Following CySEC Approval the Company can immediately start providing services.

Image by Jeremy Bezanger
 
 

Timeline Estimates

Preparation of application and submission: 1 month (this timing depends on responsiveness of the client to provide the documentation required to be filed with the Application) 

 

Final CySEC decision on granting the license – The Directive mentions 6 months, however this is solely dependent on and at the discretion of CySEC

Type of Services in Crypto Assets

Category 1

 

CASPs who provide investment advice

 

Category 2

CASPs who provide the service mentioned in Category 1 and any of the bellow:

  • Reception and transmission of orders in relation to one or more financial instruments; and/or

  • Execution of orders on behalf of clients and/or

  • exchange between cryptocurrencies and banknotes and/or

  • participation and/or provision of financial services on distribution, supply and/or sale of cryptocurrencies, including the initial offer and/or

  • disposal of cryptocurrencies without commitment of withdrawal and/or

  • Portfolio Management.

 

Category 3

CASPs that provide any of the services mentioned in Category 1 or 2 and / or:

  • management, transfer, retention, and / or safekeeping, including the custodianship, of cryptocurrencies or cryptographic keys or other means that allow control over cryptocurrencies and / or

  • acceptance and / or disposal of cryptocurrencies with commitment of withdrawal and / or

  • operation of a multilateral system in which the majority of the parties, interested in buying and selling crypto assets, may interact in a way that results in a transaction.

What Can FAI Comply do for Your Business?

We undertake the preparation and submitting of applications for CySEC CASP licensing and provide post-submission support leading up to the granting of the license, which authorizes companies to provide investment services in accordance to applicable EU laws and regulations. Services include:

Consulting on services, and design of the CASP structure

Preparation of the Application File

  • Completion of the Application Form and checklists to be submitted to the regulator

  • With input from you, where required, preparation of the applicant’s:

    • Internal Operations and AML Manuals according to EU regulations;

    • Business Plan

Assistance preparing shareholder, director and senior management Questionnaires

Application follow-up during the process of assessment by the regulator

Assistance with recruitment and appointment of Staff (extra service fee may be required)

 

LICENSING
EU & OFFSHORE