Cryptocurrencies are made possible by blockchain technology. Bitcoin is one of the most well-known digital currencies that uses blockchain technology. Similar to the US Dollar, a cryptocurrency can be used as a medium of exchange, but it differs from its fiat counterpart by being created through an encryption process.
Why Trade Crypto CFDs:
The market fluctuations for digital currencies like Bitcoin and Ethereum have been similar to those for gold. Multi-asset investments allow investors to spread their risks.
Cryptocurrencies with lower market value can be less valuable than traditional assets. Trading with lower liquidity might lead to greater volatility, so it’s essential to consider that risk. Many people are investing in cryptocurrencies, although their risk profile should always be weighed against other investments.
On May 19, 2021, the 24-hour crypto trade volume exceeded USD 500 billion
In 2021, Bitcoin and Ethereum accounted for more than half of the crypto market.
Initially launched in August 2020, Polkadot attracted interest in 2021 as an Ethereum competitor.
Licensing of investment firms
Investment firms are regulated by the Cyprus Securities and Exchange Commission (CySEC) under the Investment Services, Activities, and Regulated Markets Law 87(I)/2017. Under the EU Single Passport, investment service providers can operate in 30 countries with the same license.
Forex and brokerage markets are becoming increasingly important to the global economy.
The forex (foreign exchange) market is the largest and most liquid financial market in the world, where currencies are traded 24 hours a day, five days a week. The goal of forex trading is to profit from the changing values of currencies by buying low and selling high or selling high and buying low.
A brokerage market is a market where brokers act as intermediaries between buyers and sellers, facilitating trades and charging fees or commissions for their services. In the context of financial markets, brokerage markets typically refer to stock or securities markets where brokers facilitate trades on behalf of investors. However, the term can also be applied to other markets, such as forex or commodity markets, where brokers play a similar role.
Investors’ interest raises expectations, which are further heightened by a competitive environment. Consequently, many Forex and Forex Brokerage firms have sought licenses to operate both in the retail and professional segments of the market.
CASPs located in the European Economic Area and registered with one or more EEA National Competent Authorities must register with Cyprus’s Anti-Money Laundering agency (CYPLAF), Securities and Exchange Commission (CySEC) if the AML/CFT framework of CySEC does not cover their activities or services.
CySEC, the Cyprus Securities and Exchange Commission, has tried to classify cryptocurrencies by attempting to regulate those it deems securities.
A crypto-asset service provider is someone who provides or performs one or more of the following services:
The exchange between crypto-assets and fiat currencies:
Safely store, track and transfer your digital assets (whether or not they’re traditional cryptocurrencies).
Crypto assets are made available or sold, including initial public offerings.
The following companies provide crypto-related financial services:
Reception and transmission of orders.
Execution of orders on behalf of clients.
The firm’s investment advice includes helping companies issue and place their crypto assets based on specific commitments.
To make investments in the crypto markets without making firm commitments.
An online platform that allows people to buy and sell cryptocurrency.
Cyprus is regulating Cryptos.
CySEC published Anti-Money Laundering (AML) Amending Law 13(I)/2021 on March 1, 2021, transferring the 5th EU AML Directive into national law. The entry of Crypto Assets Service Providers (CASP) into the Cyprus legal framework for the first time was one of the adjustments made with the new AML Law. On June 25 2021, CySEC released Directive 269/2021, which contains the following information:
Register of CASPs Organisationa
The organisation’s needs and its usage of the software.
The registration process for CASPs.
This article explains how to update the information in your CASP account.
CySEC fees and contributions.
What is a Crypto Asset?
Cryptocurrencies are digital currencies that do not typically have legal tender status, but they can be used to purchase goods and services or traded for other currencies. Fiat currency (the government backs that), such as dollars, is created at will and is subject to 100% regulation by State.
Electronic Money; or Financial instruments, as defined in Part III of the First Appendix to the Law on Investment Services and Activities and Regulated Markets (Investment Code)
What is a Crypto Assets Service Provider?
A Crypto Assets Service Provider is a firm that provides one or more of the following services on behalf of another person:
- The process of exchanging cryptocurrencies for traditional fiat currencies.
- The transfer of crypto assets.
- Management and storage of cryptocurrency.
- The sale of crypto assets, including the first such offering.
Facilitating the purchase and sale of crypto-assets.
- Order reception and transmission.
- Order fulfilment on behalf of clients.
- Dealing on one’s behalf.
- Portfolio admiration
- Providing investment guidance.
- Investment in cryptocurrency for a fixed duration;
- Crypto-asset placement without a strong commitment basis.
- An alternative system in which buyers and sellers connect directly to each other rather than using a single intermediary.
- Our licensing services for CASP
- Internal policies and processes can help you comply with regulatory standards, putting clients at ease when they learn of your firm’s licenses.
- Services Following Licensing
We can help you find a Risk Manager or Internal Auditor who is the best fit for your company.
We can assign an Internal Auditor or Risk Manager to work with the Officer on identifying and addressing risks.
We provide guidance to our clients on investing in and utilizing cryptocurrencies, and help them stay informed about regulatory compliance, including new legislation.
For any queries regarding any aspect of cryptocurrencies, as well as for those involved in the crypto trade, crypto investment funds, registration process for CASPs or any other legal issue under the sun our law firm, Simon Zenios & Co LLC, is dedicated to providing comprehensive assistance and support and we are always available. Whether you need assistance with the cryptocurrencies or require any other legal advice, our firm is here to help.