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CySEC Calls On Crypto Firms To Strengthen AML Controls After MiCA Transition

The Cyprus Securities and Exchange Commission (CySEC) has urged regulated financial firms to strengthen their anti-money laundering (AML) and counter-terrorist financing (CTF) controls as the European Union’s transition period under the Markets in Crypto-Assets Regulation (MiCA) ended on July 1, 2026.

In a circular issued this week, the regulator referred firms to new guidance from the EU Authority for Anti-Money Laundering and Countering the Financing of Terrorism (AMLA), outlining the risks that may emerge as the crypto-asset market adapts to the new regulatory framework.

Market Transition Raises New Compliance Challenges

With the transition period now over, firms wishing to continue providing crypto-asset services in the European Union must be authorised as MiCA-compliant Crypto-Asset Service Providers (CASPs).

CySEC said the market is expected to undergo significant changes as unauthorised virtual asset service providers either cease operations or their customers move to authorised firms. According to AMLA, that process could increase money laundering and terrorist financing risks if firms fail to maintain appropriate controls while customers and assets are transferred.

A Risk-Based Approach Remains Essential

Rather than automatically rejecting customers moving from unauthorised providers, AMLA recommends that authorised firms assess each relationship individually. CySEC echoed that guidance, urging firms to avoid blanket de-risking practices and instead apply customer due diligence measures proportionate to each customer’s risk profile.

The regulator said maintaining a risk-based approach remains central to ensuring effective compliance while allowing legitimate business relationships to continue.

Wind-Down Plans Require Continued Oversight

CySEC also highlighted the risks associated with firms exiting the market, warning that AML and CTF controls may weaken during the wind-down process, particularly where compliance shortcomings already exist.

To mitigate those risks, firms should maintain robust governance arrangements, adequate resources and documented wind-down plans where required under national legislation. Customer due diligence, transaction monitoring and suspicious transaction reporting must remain fully operational until all regulated activities have formally ceased.

The regulator also noted that rapid market exits could reduce visibility over customer relationships and crypto-asset transfers, potentially creating opportunities for illicit financial activity, including sanctions evasion.

Customer Migration May Increase Risk Exposure

For authorised CASPs, the transition may significantly alter customer profiles as clients migrate from firms that are no longer permitted to operate.

CySEC said firms should ensure their transaction monitoring systems, staffing levels and operational capacity are sufficient to manage higher volumes of onboarding and crypto-asset transfers. Customer due diligence should remain at the centre of the onboarding process, with enhanced due diligence applied where higher risks are identified.

At the same time, the regulator stressed that customers transferring from unauthorised virtual asset service providers should not automatically be considered high risk. Instead, every relationship should be assessed individually under a risk-based framework.

FATF Guidance Supports The New Framework

CySEC also directed firms to guidance issued by the Financial Action Task Force (FATF) on the risks associated with offshore and unauthorised virtual asset service providers.

According to the regulator, supervised entities are expected to identify and assess money laundering and terrorist financing risks arising from relationships, transactions and business activities involving such providers, and to apply appropriate mitigation measures where necessary.

The circular concludes that regulated entities should fully consider the risks arising from MiCA’s implementation and continue strengthening their risk-based AML and CTF controls in line with Cyprus’ Prevention and Suppression of Money Laundering Activities Law.

Bank of Cyprus And Wealthyhood Launch Digital Investing Platform For Cyprus

The Bank of Cyprus and Wealthyhood have launched a co-branded investment platform aimed at making investing more accessible in Cyprus, with the service available to all residents regardless of whether they are customers of the bank.

Marking the first major milestone in the strategic partnership between the two companies, the launch follows the Bank of Cyprus’ role as lead investor in Wealthyhood’s €6 million funding round earlier this year.

A Platform Designed To Expand Access

Combining Wealthyhood’s digital investment infrastructure with the Bank of Cyprus’ customer reach, the new Wealthyhood x BoC mobile app and web platform is designed to broaden access to investing across the island.

Although open to all residents of Cyprus, Bank of Cyprus customers will benefit from a simplified onboarding process. By linking their bank accounts, users can complete identity verification more quickly, transfer funds seamlessly and begin investing with fewer steps.

Additional features and customer benefits are expected as integration between the two companies continues to evolve.

Strengthening Digital Investing In Cyprus

For Wealthyhood, the partnership represents far more than a funding relationship. Co-founder and Chief Executive Alexandros Christodoulakis said the bank’s decision to partner with the company validates the technology it has spent years developing.

“Our partnership with the Bank of Cyprus is far more than a capital investment. It is enterprise-level validation of the infrastructure we have spent years building.”

Rather than investing significant time and resources in developing its own platform, the bank chose to partner with an established wealthtech provider, allowing it to bring a digital investment solution to market more quickly. Christodoulakis also emphasised that the platform is intended to promote disciplined, long-term investing rather than speculative trading.

“We are not here to launch another speculative day-trading gimmick. We are here to bridge the financial literacy gap for Millennials and Generation Z across Cyprus, giving them the tools, transparency and structure they need to take control of their financial future with confidence.”

Addressing A Gap In The Local Market

According to Christos M. Ioannou, Head of Private and Affluent Banking at the Bank of Cyprus, the partnership was created to address growing demand for a modern, accessible investment platform.

“Recognising a gap in the Cypriot market for a modern and accessible digital investment platform, the Bank of Cyprus entered into a strategic partnership with Wealthyhood to make investing more accessible to a wider audience.”

Available to everyone in Cyprus, the platform is intended not only for existing Bank of Cyprus customers but for anyone looking to begin investing. That approach, Ioannou said, reflects the bank’s broader commitment to improving financial literacy and encouraging wider investment participation across the country.

He added that the initiative is designed to help younger generations and first-time investors start building wealth in a simple, responsible and secure way.

Tools For Every Type Of Investor

Among the platform’s features are a financial literacy hub with more than 50 educational guides, a financial glossary, daily market updates and analyst insights tailored to local users.

Investors will also gain access to international markets, including fractional share investing from as little as €1, while trades will be available with zero commission fees.

To accommodate different investment styles, the app combines self-directed investing with an AI-powered portfolio builder and robo-advisory tools. Autopilot enables users to automate recurring investments and portfolio rebalancing, while an AI Co-Pilot, currently under development, will allow users to ask questions about markets and portfolios, manage accounts and execute investment orders through a conversational interface.

Investment Risk Still Applies

As with any investment product, the companies reminded users that investments can rise or fall in value.

Investment services are provided exclusively by Wealthyhood Europe AEPEY. The Bank of Cyprus does not provide investment services or investment advice and is not responsible for the services offered through the platform.

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