Crypto licence in Cyprus

Crypto licence in Cyprus

Cyprus remains a strategic hub for fintech and cryptocurrency businesses, offering a robust legal framework, access to the EU market, and a favourable tax regime. With the implementation of the 5th Anti-Money Laundering Directive (AMLD5) and alignment with MiCA regulations, obtaining a crypto licence in Cyprus has become both necessary and advantageous for Virtual Asset Service Providers (VASPs).

Regulatory framework

Cyprus does not have a separate cryptocurrency law but has incorporated crypto assets under its AML framework. The competent authority is the Cyprus Securities and Exchange Commission (CySEC), which regulates and supervises entities engaging in crypto-related services through the CASP (Crypto Asset Services Provider) Registration regime.

As of 2024, the following frameworks apply:

• AMLD5: Cyprus transposed the EU directive, extending AML obligations to crypto service providers.

• MiCA (Markets in Crypto-Assets Regulation): Applicable from mid-2025 across the EU, Cyprus aligns its regulations accordingly.

• CySEC Directives: Provide operational, reporting, and compliance requirements for CASPs.

Who needs a crypto licence in Cyprus?

Entities involved in any of the following activities must register with CySEC as a CASP:

• Exchange between crypto assets and fiat currency

• Exchange between crypto assets

• Custodian wallet services

• Transfer of virtual assets

• Participation in and provision of financial services related to an issuer’s offer and/or sale of crypto-assets (including ICOs)

Advantages of obtaining a crypto licence in Cyprus

• Access to the EU market: With Cyprus being an EU Member State, a licensed VASP may benefit from potential passporting under MiCA.

• Business-friendly environment: Cyprus offers low corporate tax (12.5%), developed financial infrastructure, and bilingual professionals.

• Reputation and regulatory clarity: Being under CySEC supervision enhances credibility and investor confidence.

• Robust legal services: Cyprus boasts strong legal support for fintech and blockchain companies.

Licensing requirements

To obtain a crypto licence (CASP registration), the applicant must:

1. Incorporate a Cyprus legal entity
   Typically a limited liability company.

2. Establish physical presence in Cyprus
   Including premises and employees.

3. Appoint fit and proper directors
   With knowledge and experience in financial/crypto services.

4. Maintain AML and compliance policies
   In line with EU and CySEC guidelines.

5. Minimum capital requirements
   Depending on services:

   • €50,000 for basic services

   • €125,000–€150,000 for advanced services

6. Submit application to CySEC
   With full documentation, business plan, AML procedures, KYC/AML manuals, and more.

Timeline and procedure

• Preparation phase: 2–4 weeks
  Incorporation, policies drafting, bank account setup.

• CySEC review: 2–4 months
  Includes queries and possible clarifications.

• Final approval: Licence granted, publication on CySEC register.

Compliance obligations after registration

Once registered, CASPs must:

• Submit periodic AML reports

• Conduct ongoing customer due diligence (CDD)

• Maintain transaction records

• Appoint a compliance officer

• Inform CySEC about any material changes

Non-compliance may lead to fines or deregistration.

At Hadjivangeli & Partners LLC, we guide clients through the full lifecycle of crypto licence acquisition in Cyprus:

• Company incorporation and structuring

• Preparation and submission of CASP application

• Drafting of AML and internal policies

• Legal advice on MiCA readiness

• Ongoing compliance and audit support

We offer legal precision, strategic insight, and full confidentiality at every step.

As the EU continues to regulate the digital asset market, Cyprus positions itself as a premier destination for crypto businesses. With a forward-looking regulator and established legal infrastructure, obtaining a crypto licence in Cyprus is not only compliant — it’s a strategic investment in your digital future.

Get in touch with Hadjivangeli & Partners LLC to begin your crypto journey in Cyprus with confidence.

This publication has been prepared as a general guide and for information purposes only. It is not a substitution for professional advice. One must not rely on it without receiving independent advice based on the particular facts of his/her own case. No responsibility can be accepted by the authors or the publishers for any loss occasioned by acting or refraining from acting on the basis of this publication. This article is for informational purposes only. For further advice, please contact us at the contacts listed on the site.