The Cyprus Securities and Exchange Commission (CySEC) on Wednesday announced that Crypto-Asset Service Providers (CASPs) in Cyprus can now apply for a preliminary assessment under the EU’s Markets in Crypto-assets Regulation (MiCAR).

This aims to ensure a smooth transition ahead of the regulation’s full implementation on December 30, 2024.

The commission explained that “the decision by CySEC to implement a preliminary examination phase for MiCAR, also allows its authorised entities to notify the regulator of their intention to provide crypto-asset services”.

It noted that both the application and notification forms are available on CySEC’s website.

“This initiative is designed to ensure a smooth transition to MiCAR which represents a major step
forward for the protection of investors in financial markets
” said CySEC chairman George
Theocharides.

Moreover, the commission said that “any decisions for granting or refusing authorisation or as to the completeness of a notification will be made by CySEC following MiCAR’s application for CASPs on December 30 2024”.

In a separate announcement, CySEC highlighted the European Commission’s adoption of several MiCAR-related delegated acts, specifying the regulatory requirements for notifications and authorisations, though these acts will not become effective until they are published in the EU’s Official Journal.

To facilitate the transition, the commission has engaged in ongoing discussions with prospective applicants, offering informal guidance on regulatory compliance to ensure readiness for MiCAR’s full implementation.

Prospective CASPs should note that while applications can be submitted early, CySEC is not obligated to begin the official assessment process until MiCAR’s enforcement date in December 2024, as mentioned above.

During this time, CySEC said that it retains the discretion to prioritise applications, particularly from those entities already registered under Cyprus’ national rules for crypto-asset services.

Upon submission, applicants are advised that their documents will only be considered “officially submitted” upon fee payment or at MiCAR’s enforcement date, whichever is later.

Additionally, applicants may need to confirm the accuracy and relevance of their submissions by re-submitting forms close to or on the enforcement date.

The European Commission has previously stated that the regulation on the Markets in Crypto-Assets (MiCA) “covers the crypto-assets and related services and activities that are not covered by other Union legislative acts on financial services”.

“This dedicated and harmonised framework for markets in crypto-assets,” it continued, “will support innovation, will provide for the proportionate treatment of issuers of crypto-assets and crypto asset service providers to scale up their business cross borders”.

It also said that it will “provide significant benefits in terms of cheaper, faster and safer financial services and asset management”.