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

by THEFUTURE.TEAM

July 9, 2026

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.

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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.

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Cyprus Company Registration: Two To Four Days, Unless Security Checks Intervene

by THEFUTURE.TEAM

November 9, 2026

Cyprus aims to register companies within two to four working days when applicants submit complete documentation. However, regulatory approvals, sanctions checks, foreign ownership and national security considerations can extend the process or prevent registration.

Energy, Commerce and Industry Minister Michael Damianou outlined the timeframe in a written response to MP Efrem Christou, who asked about company formation procedures and the checks required before approval.

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Fast Registration Depends On Complete Documentation

Damianou said authorities seek to process complete applications within two to four working days, regardless of a company’s structural complexity. The timeframe also depends on whether applicants pay an additional fee for expedited processing.

According to the official incorporation requirements, the standard registration fee is €165, rising to €235 for companies without share capital. Expedited processing costs an additional €100.

Applicants must submit an approved company name, a memorandum and articles of association, and forms HE1, HE2 and HE3. Public companies must also provide form HE5.

Regulated Businesses Require Additional Approval

Companies operating in certain sectors must obtain prior clearance from the relevant authorities or professional bodies. These include medical and dental businesses, law firms, insurance and reinsurance companies, and firms supervised by the Cyprus Securities and Exchange Commission.

The Central Bank of Cyprus must also approve company names associated with payment institutions, electronic money and foreign exchange services. Additional restrictions apply to educational institutions using terms such as “university” or “college”, casino operators, broadcasters and wine producers.

Non-profit organisations seeking to register without “Limited” or “Ltd” in their names also require ministerial authorisation.

Sanctions And Foreign Ownership Trigger Extra Checks

Applications involving shareholders, directors or company secretaries subject to EU, UN or US sanctions receive additional scrutiny. Registration can proceed only if the competent sanctions authority does not prohibit it. Damianou noted that US sanctions are considered indirectly but have not been incorporated into Cyprus legislation in the same way as EU and UN restrictions.

Applications involving Turkish interests are also subject to additional review. Under procedures introduced around 20 years ago, the registrar must consult national security services before proceeding with registrations involving Turkish interests or businesses that could threaten the Republic’s security.

Damianou distinguished these cases from applications submitted by Turkish Cypriots, saying there is “no substantial difference” in how their registration documents are examined. Applications may nevertheless be refused if classified information raises concerns about national interests or national security.

Public Servants Face Separate Restrictions

Under Article 65 of the public service law, government employees cannot act as directors, company secretaries or shareholders in private or public companies without prior special permission from the finance minister.

Proposed Law Would Expand Registrar’s Powers

The government is also seeking to strengthen the Registrar of Companies’ authority to address potential security risks. An amendment to the companies law, submitted to Parliament on September 17, would allow the registrar to reject applications, refuse company filings or remove existing businesses from the register on grounds including national security, public order, public interest and the protection of state sovereignty.

The proposal, approved by the Council of Ministers on August 6, remains before the House commerce committee. It would allow authorities to withhold detailed justifications where disclosure could reveal sensitive information, while informing affected companies of the general grounds for decisions.

The bill follows parliamentary discussions about companies controlled by non-EU nationals, particularly those with Turkish ultimate beneficial owners, and possible implications for property ownership through foreign-controlled businesses. Further details are available in the proposed amendment and earlier parliamentary reporting.

Balancing Investment And Oversight

Cyprus is seeking to maintain an efficient company registration process while strengthening checks on ownership, sanctions compliance and potential security risks.

The two-to-four-day target supports the country’s appeal to entrepreneurs and international investors, but the actual timeline depends on the nature of the business, the documentation submitted and any additional regulatory or security reviews required.