CySEC Starts to Accept Crypto Licence Applications Under MiCA, but No Deadline on Decision

The Cyprus Securities and Exchange Commission (CySEC) announced today (Wednesday) that it is now accepting Crypto Asset Service Provider (CASP) licence applications from prospective entities and individuals for preliminary assessment under the incoming Markets in Crypto-Assets Regulation (MiCA).

The regulator's decision came ahead of the full implementation of MiCA for all European Economic Area members, which will become effective on 30 December 2024.

“This initiative is designed to ensure a smooth transition to MiCAR which represents a major step forward for the protection of investors in financial markets” said the CySEC Chairman, Dr George Theocharides.

No Guarantee of a Decision before the EU Deadline

However, the Cypriot regulator clarified that it does not guarantee approval of the CASP licence before the EU deadline. However, it may prioritise applications and notifications from the existing locally registered entities.

“CySEC reserves the right to assess, consider, or respond to applications/notifications at its discretion, and under no circumstances does a submission during the preliminary examination phase ensure the commencement of the assessment before 30 December 2024 or an expedited procedure,” the Cypriot regulator stated.

“However, CySEC may prioritise applications/notifications from entities already registered with CySEC for the provision of crypto-asset services under the National Rules.”

Unified Crypto Rules in the EU

Last month, CySEC announced that it would stop accepting notifications from EEA firms for cross-border crypto services on 30 October 2024. It asked companies to submit a notification by 30 October and obtain a MiCAR authorisation by 1 July 2026 to continue operations.

The regulator further clarified that despite the pan-European implementation of the MiCA regulations, there is yet to be a timeline for local regulators to approve applications.

“Any applications/notifications submitted during the preliminary examination phase that are not assessed or reviewed up until 30 December 2024 will be assessed within the timeframes and requirements established by MiCAR,” the regulator added.

“Any decision to grant or refuse authorisation or to conclude on the completeness of a notification will be made by CySEC following MiCAR’s application for CASPs on 30 December 2024.”

The incoming MiCA framework will override all existing local crypto licensing rules in place by national regulators within the EU. One of the major advantages of MiCA is that it will allow the passporting of licences across the EEA, which will align with the existing financial services licence in the bloc.

However, MiCA will also mandate the disclosure of the identities of crypto users, along with several other rules. Earlier this year, the EU already implemented MiCA rules for stablecoins, and the framework will also cover all crypto assets in the EU from the end of this year.