- Trending
- Comments
- Latest
Cyprus has sent a bill to parliament that would let regulators fine crypto firms €15 million or 15% of annual turnover for serious market abuse, as the island builds its enforcement framework for the EU’s MiCA regulation.
The Markets in Crypto-Assets Bill of 2026, submitted October 8, would also give the Central Bank of Cyprus and CySEC powers to suspend licences and bar executives from management roles. It is not yet law.
The proposed legislation introduces significant financial consequences for cryptocurrency businesses that violate regulatory obligations, particularly those involving market abuse and investor protection.
Under Article 111 of MiCA, companies involved in serious infringements, including insider dealing, unlawful disclosure of inside information and market manipulation, may face financial penalties reaching at least €15 million or 15% of their annual turnover, depending on the applicable provision.
Importantly, the €15 million amount is not a universal maximum. Larger companies could face substantially higher penalties where sanctions are calculated against annual revenue.
The framework also provides for fines of up to €5 million for individuals responsible for certain market-abuse violations.
Beyond market manipulation, the Cyprus crypto rules address failures involving licensing, information disclosure and the provision of cryptocurrency services without meeting regulatory requirements.
Depending on the category of infringement, corporate penalties under MiCA may be calculated at 3%, 5% or 12.5% of annual turnover. Regulators must also have the authority to impose fines of at least €5 million for specified corporate violations.
These measures are intended to discourage misconduct while ensuring that financial penalties reflect the seriousness of regulatory breaches.
For cryptocurrency exchanges, custodians and other service providers, the proposed Cyprus crypto rules place greater importance on internal compliance procedures, transparent operations and adherence to applicable licensing requirements.
Financial penalties represent only one part of the proposed supervisory framework. The legislation also supports broader regulatory intervention when cryptocurrency businesses fail to comply with their obligations.
Under the Cyprus crypto rules, competent authorities can conduct investigations, carry out inspections, issue compliance orders and restrict certain business activities.
More serious violations may result in the suspension or withdrawal of authorisation to provide crypto-asset services. Individuals responsible for specified infringements may also face temporary restrictions on occupying management positions.
The Central Bank of Cyprus and CySEC were previously designated as the country’s competent authorities for MiCA through a Finance Ministry notification published in November 2024.
Their responsibilities cover different areas of the cryptocurrency sector.
The central bank exercises supervisory functions relating to certain asset-referenced tokens and electronic-money tokens, while CySEC oversees other crypto-asset activities and service providers falling within its jurisdiction.
CySEC has already introduced licensing procedures, application requirements and supervisory guidance to help businesses navigate the EU framework.
The proposed Cyprus crypto rules would reinforce these existing arrangements by establishing domestic provisions for exercising the enforcement powers required under MiCA.
The framework also targets activities capable of distorting cryptocurrency markets, including transactions or practices that create misleading impressions about the supply, demand or prices of digital assets.
Such provisions are particularly relevant to trading platforms and other market participants whose operations may affect investor confidence and market integrity.
The legislative proposal forms part of Cyprus’ implementation of the European Union’s wider cryptocurrency regulatory framework rather than the introduction of an entirely separate regulatory regime.
MiCA establishes common requirements for issuing, offering and trading crypto-assets across EU member states. It also governs the conduct, authorisation and organisational responsibilities of businesses providing cryptocurrency-related services.
The regulation includes provisions covering stablecoins, particularly asset-referenced tokens and electronic-money tokens, which are subject to additional requirements designed to address consumer protection and financial stability risks.
Although MiCA’s principal provisions became applicable across the European Union on December 30, 2024, individual member states must maintain national arrangements enabling their regulators to exercise the supervisory and enforcement powers established by the regulation.
The Cyprus crypto rules therefore seek to complete the country’s domestic legal framework while supporting consistent application of the EU’s requirements.
For cryptocurrency businesses operating from Cyprus, the changes also carry implications beyond the island’s borders.
Companies authorised under MiCA may provide eligible crypto-asset services across EU member states through the regulation’s cross-border arrangements, provided they satisfy the relevant conditions.
This means the Cyprus crypto rules could become an important consideration for businesses seeking to establish Cyprus as a base for wider European cryptocurrency operations.
Firms would need to demonstrate that their governance structures, licensing arrangements and business practices satisfy applicable regulatory standards.
The Markets in Crypto-Assets Bill of 2026 remains subject to parliamentary consideration before it can become law.
According to parliamentary records, the proposed legislation was formally submitted to the House of Representatives on October 8 alongside other financial legislation.
Lawmakers will now examine its provisions, with potential amendments possible before final approval.
Until that process is completed, the proposed national enforcement measures should not be treated as enacted legislation, although the underlying EU MiCA requirements are already applicable.
The Cyprus crypto rules nevertheless signal a stronger emphasis on regulatory accountability as the country develops its cryptocurrency supervisory framework.
For companies providing digital asset trading, custody and related services, the proposed measures reinforce the importance of compliance with European regulatory obligations.
If approved, the legislation would strengthen the ability of Cyprus’ financial authorities to investigate violations, sanction misconduct and intervene against businesses that fail to meet established standards.
The development highlights Cyprus’ effort to balance access to Europe’s regulated cryptocurrency market with stricter oversight, greater investor protection and stronger safeguards against financial misconduct.
Copyright © 2025 - The Bit Gazette.
