CySEC stops accepting new crypto service applications ahead of EU rules

   The Cyprus Securities and Exchange Commission (CySEC) on Thursday announced that it will no longer accept new applications for registration of Crypto-Asset Service Providers (CASPs). This decision is in line with the upcoming implementation of the EU’s Regulation for Markets in Crypto-Assets (MiCAR), which takes effect on December 30, 2024. According to CySEC, this move comes as part of the transition to the new regulatory framework established by Regulation (EU) 2023/1114 for Markets in Crypto-Assets. “From today onwards, applications for registration of CASPs will no longer be accepted in accordance with the provisions of National Rules,” the regulator stated. It further clarified that this applies as the new rules gradually come into force. Moreover, CySEC highlighted that the MiCAR regulation already started to apply to issuers of Asset Reference Tokens (ARTs) and E-Money Tokens (EMTs) as of June 30, 2024. For CASPs, a transitional period has been set under Article 143(3) of MiCAR. This allows registered CASPs to continue operating until July 1, 2026 or until they are either granted or refused authorisation under Article 63, whichever comes first. CySEC further stated that it will publish application documents in line with MiCAR’s Article 62(1) once the European Commission issues the necessary Regulatory and Implementing Technical Standards. In the meantime, interested parties are advised to refer to the Draft Technical Standards provided by the European Securities and Markets Authority (ESMA) to prepare their applications in advance. Entities that plan to provide crypto-asset services within the European Union and are authorised under existing regulations such as the Investment Services and Activities and Regulated Markets Law of 2017, should also prepare for MiCAR. In addition, they must consider Article 60 provisions when applying for authorisation. What is more, CySEC announced that as of October 30, 2024, it will stop accepting notifications from entities registered with European Economic Area (EEA) National Competent Authorities seeking to offer crypto-asset services in Cyprus. However, entities that submit their notifications before the cut-off date will be allowed to continue providing services cross-border during the transitional period. These entities, if applying for authorisation under MiCAR, must inform CySEC of their authorisation status immediately. This is required so that CySEC can update the EEA CASP Register accordingly during the transitional period.