CySEC proposes stricter financial oversight for crypto companies

The Cyprus Securities and Exchange Commission (CySEC) has opened a public consultation on a draft new directive concerning cryptocurrency services operating in Cyprus. The initiative is related to the implementation of the EU-wide MiCAR (Markets in Crypto-Assets Regulation), which introduces uniform rules for regulating the crypto market in the EU.

According to CySEC’s proposal, crypto companies will be required to disclose an extended set of financial data to the regulator and regularly report on their activities. This includes providing preventive information, trial balances, balance sheets, profit and loss statements, and annual audited financial reports. Submission deadlines will be set in accordance with the EU MiCAR implementing acts.

The Commission emphasizes that the aim of the directive is to strengthen supervision and ensure genuine compliance with prudential requirements, rather than formal control. Essentially, crypto providers are proposed to be placed under conditions similar to those already applied to licensed investment firms in Cyprus.

The new requirements will apply only to crypto service providers that have obtained a CySEC license under Article 63 of the MiCAR regulation. They will not affect investment funds, market operators, management companies, or alternative investment fund managers, provided they offer crypto services after notifying the regulator, rather than under a separate crypto license. MiCAR provides exceptions for such entities as they are already under a different supervisory regime.

Public consultations on the draft directive will continue until 12 January 2026. Interested parties can send comments and proposals to CySEC by email at [email protected].