Offering Crypto-Asset Services Through Your CIF: Key Insights
Today 30th of December 2024, Markets in Crypto-Assets Regulation (MiCAR) comes into force, with the first EU legislative package that caters for digital and crypto assets, marking the growing recognition of crypto assets as a legitimate and dynamic sector within the financial industry. In this regard, the Cyprus Securities and Exchange Commission’s (CySEC) accepts notifications from Cyprus Investment Firms (CIF) wishing to offer crypto-asset services, as per Article 60 of the MiCAR, represents a significant milestone in the evolving regulatory landscape.
Over the past decade, crypto assets have evolved from niche innovations to globally recognized instruments, offering new opportunities for diversification and growth. For CIF entities, Article 60 of MiCAR opens the door to expanding their services and staying ahead in a rapidly transforming market. Embracing this opportunity not only fosters innovation but also positions firms to meet the increasing demand for regulated crypto asset services.
Through this article, the SALVUS Crypto-Assets Licensing team provides a detailed overview of the crypto asset services and their corresponding investment services under MiCAR, the notification requirements, expected timeline, and how we can assist you in navigating this process seamlessly:
1. Which are the crypto asset services?
2. Notification Requirements
3. Notification Timeframe
4. How SALVUS can assist you
We regularly share bite-sized insights on LinkedIn such as those found in this article
1. Which are the crypto asset services?
The services CIFs can offer are determined by the investment services they are already authorized to provide. The table below outlines the equivalencies between crypto-asset services and investment services as per Article 60 of MiCAR:
Crypto-asset services | Investment Services |
---|---|
Execution of orders on behalf of clients | Execution of orders on behalf of clients |
Reception and transmission of orders for crypto-assets on behalf of clients | Reception and transmission of orders in relation to one or more financial instruments |
Exchange of crypto-assets for funds or for other crypto-assets | Dealing on own account |
Providing advice on crypto-assets | Investment advice |
Providing portfolio management on crypto-assets | Portfolio management |
Placing of crypto-assets | Underwriting or placing of financial instruments on a firm commitment basis and placing of financial instruments without a firm commitment basis |
Operation of a trading platform for crypto-assets | Operation of a multilateral trading platform |
Providing custody and administration of crypto-assets on behalf of clients | Safekeeping and administration of financial instruments, including custodianship and related services |
2. Notification Requirements
To notify CySEC of their intention to provide crypto-asset services, CIFs must submit the following documents and policies:
- Business Plan (Programme of Operations)
- Group Structure and Organizational Structure
- Internal Operations Manual
- AML Manual
- Business Continuity Plan
- ICT Systems and Security Arrangements Policy, including:
- Cybersecurity Audit Report
- ICT Systems Audit Reports
- Segregation and Safekeeping of Clients’ Crypto-Assets and Funds Policy
- Custody and Administration Policy
- Operating Rules of the Trading Platform and Market Abuse Detection Policy
- Exchange of Crypto-Assets for Funds or Other Crypto-Assets Policy (if applicable)
- Execution Policy
- Provision of Advice or Portfolio Management on Crypto-Assets Policy (if applicable)
- Transfer Services Policy (if applicable)
- Insurance Policy
If you require more information or assistance regarding the application process and requirements, please contact our Crypto-Assets Licensing team at info@salvusfunds.com; We are here to support you and address any questions you may have.
3. Notification Timeframe
The maximum timeframe for the notification process structured as follows:
- 40 Working Days: CIF must notify CySEC at least 40 working days before providing crypto-asset services for the first time.
- 20 Working Days: CySEC has 20 working days to assess the information provided.
- If incomplete, CySEC will notify the CIF immediately. The CIF then has 20 working days to provide the missing information.
- During this period, the 40-day requirement is suspended.
- Further Information Requests: CySEC may request additional information. However, the 40-day timeline cannot be further suspended.
- Final Approval: Crypto-asset services cannot commence until the notification process is complete and approved.
4. How SALVUS can assist you
Navigating the regulatory framework for offering crypto-asset services can be complex. With our extensive experience, specialized knowledge, and probably the promoter that delivered most CASP licenses under CySEC, we are well-positioned to guide you through this process, ensuring compliance and operational readiness.
If you require more information or assistance regarding the application process and requirements, please contact our Crypto-Assets Licensing team at info@salvusfunds.com; We are here to support you and address any questions you may have.
#StayAhead
The information provided in this article is for general information purposes only. You should always seek professional advice suitable to your needs.