Force

MN Coin

<p>The post <a rel="noopener noreferrer nofollow" href="https://coinpedia.org/news/cyprus-amends-money-laundering-law-to-regulate-crypto-services/">Cyprus Amends Money Laundering Law to Regulate Crypto Services</a> appeared first on <a rel="noopener noreferrer nofollow" href="https://coinpedia.org">Coinpedia Fintech News</a></p>
<p>Amidst crypto regulation developments in the EU, Cyprus is amending its “Prevention and Suppression of Money Laundering Law” to enforce fines on illegal crypto service providers, aiming to regulate the cryptocurrency industry better.</p>
<h2 class="wp-block-heading" id="h-amending-and-enforcing-law"><strong>Amending and Enforcing Law</strong></h2>
<p>By enforcing severe fines on crypto service providers (CSPs) who operate illegally, Cyprus is attempting to regulate the cryptocurrency industry better. The “Prevention and Suppression of Money Laundering Law” is being amended, <a href="https://cyprus-mail.com/2023/10/10/cyprus-to-impose-strict-penalties-for-unregulated-crypto-service-providers/" rel="noopener noreferrer nofollow">according to the government.</a>&nbsp;</p>
<p>The Financial Action Task Force (FATF) international standards and the recommendations made in the <a href="https://www.coe.int/en/web/moneyval/-/moneyval-report-on-cyprus-improvements-on-measures-to-combat-money-laundering-and-the-financing-of-terrorism" rel="noopener noreferrer nofollow">MONEYVAL report</a> will both be complied with by Cyprus due to this change.</p>
<h2 class="wp-block-heading" id="h-mandatory-registration-with-cysec-for-csps"><strong>Mandatory Registration with Cysec for CSPs</strong></h2>
<p>The proposed amendment mandates that crypto asset trading firms, or CSPs, register with Cyprus Securities and Exchange Commission (CySEC), the nation’s financial authority. Serious repercussions, such as fines of up to €350,000 and imprisonment for a maximum of five years, or both, may occur if this rule is not followed.&nbsp;</p>
<p>Given the development of new technology, the government has defended these sanctions as essential steps in reducing the risks of money laundering and terrorism financing. Cyprus is not the only country implementing strict regulations against CSPs without a license.&nbsp;</p>
<p>Malta has additionally imposed fines of up to €15 million for infringement of cryptocurrency regulations and punishments of up to six years in prison. In contrast, nations like France and Ireland have also implemented a variety of penalties for comparable infractions, including imprisonment and hefty fines.</p>
<h2 class="wp-block-heading" id="h-cyprus-bar-association-raises-concerns"><strong>Cyprus Bar Association Raises Concerns</strong></h2>
<p>The Cyprus Bar Association has expressed concern about the potential impact of these strict regulations on the country’s reputation as a business-friendly jurisdiction. They argue that while it is essential to combat money laundering and terrorism financing, the penalties imposed should be proportionate and not discourage legitimate businesses from operating in Cyprus.&nbsp;</p>
<p>The Cyprus Bar Association has <a href="https://www.boccadutri.com/cryptocurrencies-the-first-regulations-from-cysec/" rel="noopener noreferrer nofollow">voiced opposition </a>to the draft amendment. The association has voiced concerns regarding the law’s breadth and questioned the need for CSPs registered in other EU member states to additionally register in Cyprus, given that they are already subject to the jurisdiction of their home state.&nbsp;</p>
<h2 class="wp-block-heading" id="h-what-is-the-travel-rule"><strong>What is the ‘Travel Rule’?</strong></h2>
<p>The “Travel Rule,” which obliges CSPs to exchange customer and transaction information with authorities, was also suggested by the association.&nbsp;</p>
<p>The Finance Ministry responded by claiming that the rule aligns with how the EU’s single market operates. They stress that, despite their registration in other EU member states, CySEC has jurisdiction over CSPs offering services in Cyprus.&nbsp;</p>
<p>Furthermore, they guaranteed that the necessary amendments to Cyprus’ current legal framework would allow for the prompt implementation of the “Travel Rule. The Parliamentary Committee on Legal Affairs is currently reviewing this proposed change, which is expected to be approved soon.&nbsp;</p>
<p>&nbsp;Once passed, implementing the “<a href="https://sumsub.com/travel-rule/#:~:text=Who%20is%20affected%20by%20the,crime%20such%20as%20money%20laundering." rel="noopener noreferrer nofollow">Travel Rule</a>” will enhance the regulatory framework for CSPs in Cyprus, ensuring greater transparency and accountability in financial transactions. This aligns with the EU’s efforts to combat money laundering and terrorist financing across member states.&nbsp;</p>

Cyprus Amends Money Laundering Law to Regulate Crypto Services

Table of Contents

CoinPedia News

Other articles published on Oct 10, 2023

XBTO launching ProTrading platform for digital asset execution and custody

Bitkeep unveils new partnership with Sunflower Land

Binance’s $1b recovery fund plummets to just $32m

Bitcoin dominance hits 3-month high as 'hammered' altcoins risk dive

Israeli Authorities Freeze Hamas Cryptocurrency Accounts in Collaboration with Binance

Only 3% of crypto workers receive their salaries in digital currencies, highlighting the long roa...

Join our free newsletter for daily crypto updates!