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CySEC sets ground to regulate Cryptocurrencies

Fidescorp Limited > News > CySEC sets ground to regulate Cryptocurrencies
CySEC sets ground to regulate Cryptocurrencies

CySEC sets ground to regulate Cryptocurrencies

The Cyprus Securities and Exchange Commission (the ‘CySEC’) issued a circular on November 25th, providing guidance to Cyprus Investment Firms (‘CIFs’) on issues relating to crypto assets.

CIFs should firstly become authorised by CySEC to trade in cryptocurrencies, as they are not specifically regulated by previous regulation, in Cyprus or the EU in general.

The regulations set-down in the circular, deal with the treatment of crypto assets and ensure proper risk management procedures for CIFs in regard to cryptocurrencies.

The Circular specifies how CIFs should calculate own funds and capital adequacy ratio for cryptocurrency investment, the Internal Capital Adequacy Assessment Process and relevant Disclosures.

Then, CIFs should revisit their risk management procedures and strategies and ensure that all risks associated with this product are appropriately taken into consideration.

Finally, the circular concludes that, considering the nature of crypto assets, CIFs should also examine taking mitigating measures against operational, cybersecurity and reputational risks.