Submitting one of the first-ever CASP applications to CySEC

The Cyprus Securities and Exchange Commission (CySEC) released its policy statement on Crypto-Asset Services Providers (CASP), back in September. At the time, CySEC announced that existing businesses operating in the jurisdiction that can demonstrate a material existing crypto-asset activity prior to the enactment of the latest Anti-Money Laundering and Counter Financing of Terrorism (AML/CFT) Law, have until the end of October to apply. Failure to apply by the deadline meant that existing businesses must cease any provision of crypto-asset services in or from Cyprus until their application for a CASP registration has been submitted and successfully granted by CySEC. These were the Cypriot regulator’s requirements to remain compliant with the (AML/CFT) law.

Since September we had several discussions with existing clients, new connections, and other investment services stakeholders as to what the CySEC application forms would entail, as they were yet to be made public. By early October the regulator published the relevant documents they required to be completed, along with their documentation requirements and we got to work to meet the tight deadline for our clients.

Our Crypto-Assets team at SALVUS led by Evdokia Pitsillidou managed to successfully submit a CASP application, one of the first-ever, to CySEC before the end of October. Hence, we wanted to share a few interesting points on what we have learnt preparing, completing, and submitting these CASP applications to CySEC:

  • The crypto-asset services required to operate a e.g. crypto exchange must be chosen carefully and must demonstrate which component of the overall operations is being covered by which crypto-asset service within their overall crypto-business model.
  • Crypto-asset services providers’ safeguarding arrangements and the disclosure of the crypto-asset addresses of the custodian wallets are key parts of the CASP registration application.
  • The details needed in the money laundering Risk Assessment are to be included in the fullest detail possible.
  • The policies, processes and procedures with which the CASP minimises the risk of theft or loss of client crypto-assets can best be presented using diagrams or flow charts.
  • The blockchain analysis tools for crypto transaction monitoring, crypto wallet screening, and risk analysis purposes are critical elements and their value and usage shall be presented as clearly as possible.

Additionally, our Crypto-Assets team in course of producing the Internal Operations Manual (IOM) created a checklist for contents of the IOM to assist CySEC in reviewing that part of our CASP application.

Please feel free to contact us via email at [email protected] or call us at +357 7000 7898 if you would like additional information; our Crypto-Assets team is ready to answer your questions should you have any related to Crypto-Asset Services Providers (CASP).

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