Clarification On Trading Of Virtual Currencies By The Cyprus Securities And Exchange Commission

The Cyprus Securities and Exchange Commission has issued Circular C268 subject to which it has clarified its position in relation to the trading of derivatives in virtual currencies. The CYSEC has adopted ESMA's approach as per the relevant decision dated 27 March 2018:   

Derivatives on Virtual Currencies are now capable of qualifying as financial instruments under the Law. A "financial instrument" means those instruments specified in Part III of the First Appendix of the Law. Among the financial instruments listed in Part III of the First Appendix of the Law, Derivatives on Virtual Currencies may fall under the following: i. (4): "[...] any other derivative contracts relating to securities [...] which may be settled physically or in cash";3 ii. (9): "financial contracts for differences"; 4 iii. (10): "[...] any other derivative contracts relating to assets [...] not otherwise mentioned in this Section, which have the characteristics of other derivative