Crypto firms drive surge in suspicious activity reports in Cyprus

Cyprus’ financial intelligence unit (FIU) received 24,092 reports of suspicious transactions and activities in 2025, as the growth of crypto-asset services and cross-border financial business drove a sharp increase in submissions, according to an annual assessment published by the authorities.

The report, prepared by the anti-money laundering unit (Mokas) and circulated to regulated entities by the Cyprus Securities and Exchange Commission (CySEC), examines both the volume and quality of reports submitted by businesses and professionals required to flag suspected financial crime.

Crypto-asset service providers accounted for 20,570 reports, while investment firms submitted another 980, reflecting the substantial contribution of firms licensed in Cyprus but providing services across the European area under the EU’s freedom to provide services rules.

Domestic reporting entities also increased their activity, submitting 1,183 reports, a 16 per cent rise compared with 2024.

Banks remained the largest group among traditional domestic reporting entities, filing 597 reports, followed by payment institutions with 340 and gambling service providers with 136.

Lawyers submitted 33 reports, company service providers filed 32, and accountants submitted 28 during the year.

The assessment identified transactions involving virtual assets, the use of money mules, dealings between unrelated counterparties, internet fraud and cybercrime, and suspected money laundering among the most common indicators that prompted reports.

Mokas said reporting had improved overall, with progress reflected in the quality and effectiveness of submissions, an increase in financial intelligence shared with law enforcement agencies and higher amounts of assets frozen in both domestic investigations and cross-border cases.

The unit attributed the improvement partly to more targeted guidance for reporting entities, educational and information sessions, support meetings and continued engagement with businesses and professionals.

These efforts also included cooperation through the anti-money laundering and counter-terrorist financing private-public partnership, with guidance based on the risks associated with different sectors.

According to the report, the initiatives have helped reporting entities better understand their obligations, describe the reasons for their suspicions more clearly and submit information that is more useful to investigators.

However, the authorities stressed that further improvements are still needed, with deficiencies identified in some submissions affecting the completeness and analytical value of the information provided.

Problems included weak explanations of why a transaction or activity was considered suspicious, missing supporting documents and incomplete information about the entities involved.

A total of 185 reports were also rejected at the initial submission stage because of technical shortcomings, including failure to meet narrative-length requirements and missing attachments or client identification information.

CySEC urged regulated entities to study the assessment and continue improving their suspicious transaction and activity reporting.

The report said better-quality submissions were essential to ensuring financial intelligence could be analysed effectively and passed on in a timely manner to support criminal investigations and the tracing of assets.

Beyond the number of reports received, the unit’s work resulted in 572 disseminations of financial intelligence to law enforcement bodies and state departments.

Of these, 469 were sent to the police and 58 to the tax department, the report added.

Domestic freezing orders covered assets worth more than €10 million in criminal investigations, including more than €8 million in immovable property and approximately €617,340 in crypto-assets.

In cases involving international cooperation, foreign freezing orders registered under mutual legal assistance requests amounted to approximately €17.12m, while total asset confiscations exceeded €6.5m.

The assessment highlighted the growing workload facing the financial intelligence unit as digital financial services and cross-border activity expand, while emphasising that the usefulness of reports depends not only on their volume but also on the quality of the information they contain.

Mokas said improving reporting remained an ongoing process requiring sustained commitment from all parties involved.