In preparation for the EU's Markets in Crypto-Assets (MiCA) regulation, the Cyprus Securities and Exchange Commission (CySEC) has announced a halt on new applications from crypto asset service providers (CASPs).

Why the Freeze?

CySEC's decision to stop new CASP registrations is part of the wider preparation for MiCA, which aims to create a standardized regulatory framework for crypto assets across the EU. MiCA is set to enhance investor protection and financial stability by ensuring consistent crypto asset regulation.

Implications for CASPs in Cyprus

CASPs registered before the December 30, 2024, can operate under Cyprus law until July 2026. To continue operations past this date, they must secure MiCA authorization. The transition period allows businesses to meet MiCA's stringent requirements, aligning with EU standards for transparency, security, and consumer protection.

The MiCA Regulation and its Industry Impact

MiCA is one of the most comprehensive legislative initiatives globally, focused on regulating the crypto sector. It aims for harmonized regulation across the EU, providing legal clarity and uniformity for crypto businesses and consumers. Key provisions include licensing, consumer protection measures, stablecoin regulation, and anti-market manipulation controls.

Cyprus's decision to freeze crypto asset service provider applications indicates the significant regulatory changes coming to the EU's cryptocurrency landscape.