Cyprus -- Enforcement Actions Regulatory Overview

The Cyprus Securities and Exchange Commission (CySEC) is the primary financial regulatory authority in Cyprus. While CySEC oversees various financial services, its role in regulating Virtual Asset Service Providers (VASPs) under the Anti-Money Laundering and Counter Terrorist Financing (AML/CFT) Law has become increasingly prominent.

It's important to note that direct "crypto enforcement actions" with large fines specifically targeting crypto fraud or unregistered crypto operations by the millions (as seen in some other jurisdictions) are less common in Cyprus compared to fines for deficiencies in AML/CFT compliance or organizational requirements for registered entities. CySEC's approach often involves guiding VASPs through registration and then enforcing compliance with AML rules.

Here are the most significant cryptocurrency-related enforcement actions by CySEC in the last 3 years:

1. eToro (Europe) Ltd

• Regulator Name: Cyprus Securities and Exchange Commission (CySEC)
• Entity Targeted: eToro (Europe) Ltd (a major global trading platform also offering crypto services)
• Violation Type: Non-compliance with regulatory requirements related to organizational requirements, safeguarding clients' funds, and prevention of money laundering and terrorist financing (AML/CFT). This included deficiencies in operational risk management, internal controls, and measures taken to prevent money laundering and terrorist financing.
• Penalty Amount: €380,000
• Date: January 29, 2024 (The decision covered violations from January 2020 to December 2022).
• Outcome: Imposition of an administrative fine. eToro (Europe) Ltd stated it has taken corrective measures.
• Source URL: CySEC Official Announcement - eToro (Europe) Ltd

2. Bitpanda GmbH

• Regulator Name: Cyprus Securities and Exchange Commission (CySEC)
• Entity Targeted: Bitpanda GmbH (a well-known European digital investment platform operating as a registered VASP in Cyprus)
• Violation Type: Non-compliance with the AML/CFT Law, specifically regarding internal controls and measures for the prevention of money laundering and terrorist financing, and deficiencies in customer due diligence procedures.
• Penalty Amount: €50,000
• Date: July 10, 2023 (The decision covered violations from December 2020 to September 2022).
• Outcome: Imposition of an administrative fine. Bitpanda GmbH took corrective measures.
• Source URL: CySEC Official Announcement - Bitpanda GmbH

Note: While CySEC frequently issues administrative fines against Cypriot Investment Firms (CIFs) for various regulatory breaches, these two actions stand out as significant specifically because they target prominent entities that either offer significant crypto services (eToro) or are dedicated VASPs (Bitpanda), with violations directly related to the AML/CFT framework applicable to the crypto sector. The eToro fine is particularly noteworthy given its size and the breadth of the non-compliance issues, which encompassed AML aspects relevant to its broad service offerings, including crypto.