CySEC Outlines Transitional Rules for Crypto-Asset Service Providers Under MiCA

The Cyprus Securities and Exchange Commission (CySEC) has provided updated guidance for Crypto-Asset Service Providers (CASPs) operating under the transitional provisions of the Markets in Crypto-Assets Regulation (MiCA). This announcement builds on a previous statement issued on 17 October 2024.

CySEC Sets Transitional Rules for CASPs

CASPs that were providing services in compliance with national regulations before 30 December 2024 may continue their operations during a transitional period. This period extends until 1 July 2026 or until the CASP is granted or denied authorization under MiCA, whichever occurs first.

CySEC has outlined requirements for CASPs intending to operate during this transitional phase. These entities must submit evidence demonstrating their compliance with national rules before the cutoff date of 30 December 2024. Documentation must include a confirmation letter from the CASP’s Internal Auditor and supporting details on their operations.

Transitional period for the provision of services in cryptoassets pursuant to Article 143 (3) of Regulation (EU) 2023/1114 on Markets in Crypto-Assets (‘MiCAR’)https://t.co/mY8rSzEIYN

CASPs Must Submit Data by January

The required information includes the services provided, client distribution by geography, transaction volumes, client fund and crypto-asset holdings, and income generated from these services. This data must be submitted to CySEC by 10 January 2025.

CySEC has urged CASPs needing further clarification to contact its Authorisations Department. The updated guidelines are intended to ensure CASPs comply with MiCA regulations while crossing the transitional period toward full regulatory authorization.

CySEC Prepares for MiCA Implementation with CASP License Review

Last month, Finance Magnates reported that CySEC announced it is now accepting CASP license applications for preliminary assessment under the upcoming MiCA framework.

The decision comes ahead of the full implementation of MiCA, which will take effect for all European Economic Area members on 30 December 2024.

CySEC stated that this initiative aims to facilitate a smooth transition to MiCA, which is a significant step forward in enhancing investor protection in financial markets, according to CySEC Chairman, Dr. George Theocharides.

However, the regulator clarified that it cannot guarantee approval of CASP licenses before the EU deadline, though it may prioritize applications and notifications from locally registered entities.