A. The Cypriot Scheme for Registration of Crypto assets Service Providers

Cryptosassets have been in the center of discussion since the rapid growth of the Blockchain technology and decentralized digital currencies. Resulting from the growth of this market Cyprus has designed a scheme under which international enterprises wishing to be licensed as Crypto assets Service Providers (“CASP”), can now do so through Cyprus.

The scheme was approved by a Law on the 25th of June 2021 and grants power to the Cyprus Securities and Exchange Commission (“CySEC”) to observe and ensure compliance of the directive. Therefore, from now on entities wishing to provide services in Cyprus as CASP can be registered with CySEC, as long as they meet the below criteria:

  1. CASP shall submit a duly completed registration application issued by CySEC, including all relevant information of the CASP such as the name, trade name, legal form and legal entity identifier of; physical address; services provided and/or the activities that a CASP may perform and the website of the CASP.
  2. Individuals holding an administrative position with the CASP must be honest and competent, meaning that such individuals are of good repute, possess the essential knowledge, skills and experience and devote a sufficient amount of time regarding the performance of their duties with the applicant.
  3. The Board of Directors of the CASP, should consist of at least four individuals, two of whom will be managing business activities of the CASP and two will be independent directors.
  4. CASP must have in place all appropriate policies and procedures to ensure compliance with the EU Directive and the Law.
  5. CASP must meet the capital requirements.

B. Why Cyprus?

Cyprus has historically been a hub for investors wishing to establish their enterprises benefiting from the fact that Cyprus is strategically located at the crossroad of three continents, is a full member of the European Union hence offers all the advantages resulting from the EU membership follows the English common law legal system with convenient procedures for the investors, bares a low corporate tax at the rate of 12,5% on gross annual income, provides dividend tax exemption and rich motives for relocation of personnel.

Our Firms’ Tech Law Department is available for a discussion should you require an in depth discussion on this opportunity.