The Cyprus Securities and Exchange Commission (CySEC) has issued a definitive notice to crypto-asset service providers (CASPs) operating within the Republic: all such entities must apply for authorisation under the Markets in Crypto-Assets Regulation (MiCA) by February 27, 2026, to ensure their continued legal operation.
Transition Provisions For Registered Entities
Following its announcement on October 17, 2024, and the subsequent Circular No. 674, CySEC clarified that firms registered under the existing national framework may continue operating throughout the transitional phase. This period extends until a decision on their MiCA application is rendered or until the transitional period concludes on July 1, 2026, whichever occurs first.
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Mandatory Wind-Down Protocols
In its statement, the regulator warned that any CASP failing to secure MiCA authorisation by the stipulated deadline must submit a wind-down plan. Unauthorised providers will be prohibited from offering crypto-asset services once the transitional period ends, reinforcing the imperative for compliance.
Cross-Border Service Regulations
The commission further emphasized that the cross-border provision of services to other EU member states is contingent upon the host country’s legislative provisions and any applicable grandfathering regimes. Firms are required to adhere strictly to guidance issued by the European Securities And Markets Authority (ESMA) to ensure full regulatory compliance.
Impact On The Cypriot Financial Sector
This regulatory shift marks a significant transformation for the Cypriot financial sector, aligning its digital asset operations with the rigorous standards of the European Union. CASPs that remain registered continue to be bound by domestic obligations and Regulation (EU) 2023/1113, underscoring CySEC’s commitment to enhancing confidence, transparency, and security in the crypto-asset market.
