CySEC Begins Preliminary Assessment for Crypto Providers Under MiCAR

The Cyprus Securities and Exchange Commission (CySEC) has officially announced the commencement of a preliminary examination phase for Crypto-Asset Service Providers (CASPs), ahead of the full enforcement of the Markets in Crypto-Assets Regulation (MiCAR) on December 30, 2024. This step is designed to streamline the authorisation and notification procedures for businesses seeking to operate as CASPs in Cyprus under MiCAR, the EU regulation aimed at creating a comprehensive framework for crypto-asset markets.

CySEC's announcement emphasizes the agency's efforts to assist interested parties by implementing a pre-assessment phase, which will allow businesses to submit their applications or notifications in advance. The forms for both CASP authorisation applications and notifications are now available on CySEC's official website. This is a crucial phase as it allows entities to receive feedback on their business models, policies, and procedures in an informal context before the formal regulatory deadlines take effect.

The preliminary examination phase is open to a range of prospective CASPs, including those already authorized by CySEC under existing frameworks such as central securities depositories, investment firms, market operators, and alternative investment fund managers. These entities can submit a notification under Article 60 of MiCAR. Additionally, other legal persons or organizations seeking authorisation as CASPs under Article 63 of MiCAR can also begin submitting their applications.

CySEC has clarified that while entities may submit their applications and notifications during this period, there is no guarantee that the review process will be expedited or that assessments will occur before December 30, 2024. The agency also noted that it may prioritize applications from entities already registered with CySEC under national regulations. Furthermore, the submission of applications during the preliminary phase does not mean that CySEC is bound by any specific timelines for assessment before the regulation takes full effect.

CySEC stressed that the information submitted during the preliminary phase would only be considered "officially submitted" once certain conditions are met. These include the payment of the respective fees and the re-submission of updated applications or notifications to ensure that all information remains accurate and up-to-date by the end of 2024. Any applications not reviewed by December 30, 2024, will be subject to the full requirements and timelines established by MiCAR once the regulation comes into force.