Cyprus, known for its crypto-friendly approach, is considering imposing stricter regulations on the cryptocurrency industry in the country.
According to a report from October 10 by the Cyprus Mail, the local Ministry of Finance plans to make changes to the existing law that deals with preventing and stopping money laundering.
The government has put forward a list of suggested amendments to the Parliamentary Committee responsible for legal matters in Cyprus.
Cyprus tends to match with international standards for anti-money laundering and combating the Financial Action Task Force (FATF).
The government has implemented new rules stating that companies must register with the Cyprus Securities and Exchange Commission (CySEC). Failure to comply with these regulations may result in penalties, including fines of up to €350,000, imprisonment for a maximum of five years, or a combination of both.
Concerns have risen from the Cyprus Bar Association, regarding a specific requirement introduced by CySEC. This requirement specifies that even cryptocurrency companies holding licenses from other European countries must also register with CySEC, a provision that has raised concerns.
Most crypto companies didn’t face major issues when registering their businesses in Cyprus. For example, in September, eToro, a crypto-friendly brokerage firm, received a registration from CySEC to operate as a Crypto Asset Service Provider (CASP). ByBit also received a similar license in June.
However, Binance, the world’s largest crypto exchange, decided to leave the Cyprus market in July due to increasing regulatory pressure. They said they wanted to focus on larger European Union markets.