The Cyprus Securities and Exchange Commission (CySEC) issued for
the first time regulations regarding cryptocurrency, which can be
found in Circular C417, published in the end of November 2020.
These rules have as a main aim to safeguard that Cyprus Investment
Firms (CIFs), make provision to cover investments in
cryptocurrencies and that risks involving cryptocurrencies are
managed property.
In accordance with the Circular, CIFs must first obtain
authorization from CySEC to trade in cryptocurrencies, as they are
not specifically regulated by previous financial regulation,
whether in Cyprus, or at the level of the EU.
The first three provisions outlined in the Circular, specify how
CIFs should calculate capital adequacy for cryptocurrency
investment, and how to report it.
