The Cyprus Securities and Exchange Commission (CySEC) has issued clarified guidelines for Crypto-Asset Service Providers (CASPs) operating under the transitional rules of the Markets in Crypto-Assets Regulation (MiCA). This update builds upon earlier guidance communicated on 17 October 2024.
For CASPs that have adhered to national regulations prior to 30 December 2024, continued operations are permitted during a designated transitional period. This transitional timeframe is set to last until 1 July 2026 or until the CASP receives a determination—either approval or rejection—of its authorization status under the MiCA regulation.
To proceed during this transitional phase, CASPs are required to demonstrate compliance with national regulations before the specified deadline of 30 December 2024. Essential documentation must include a confirmation letter from the Internal Auditor of the CASP, along with additional supporting operational details.
Moreover, CASPs must provide a range of information by 10 January 2025. This information includes the services offered, geographical client distribution, transaction volumes, holdings of client funds and crypto-assets, as well as income generated from these activities. This data must be submitted to CySEC to ensure that the entities are on track for compliance with the new framework.
For those CASPs seeking further guidance, CySEC has encouraged contact with its Authorisations Department. The aim of these updated procedures is to facilitate CASP compliance with MiCA regulations as they transition to full regulatory approval.
In anticipation of the MiCA’s full implementation on 30 December 2024, CASP license applications for preliminary assessment are now being accepted. This move is intended to smooth the path towards adherence to the new framework, which is viewed as a significant advancement for investor protection in financial markets.
It is important to note that while CySEC is accepting applications, it has clarified that there is no guarantee that CASP licenses will be approved before the approaching EU deadline. However, applications from entities registered locally may receive prioritized consideration.