Cyprus has added its name to a growing list of countries cconsidering regulating the digital currency business soon. In a report, the country’s Ministry of Finance stated that the sector poses some dangers of money laundering and other illegal acts, but local authorities have gained sufficient sophisticated understanding’ to resist them.

The ministry, the Advisory Authority for Combating Money Laundering and Terrorist Financing, and the House of Representatives collaborated on a risk assessment study. The study, which was commissioned in July 2020 and finished and finalized in November of this year, was commissioned in July 2020 and completed and finalized in November of this year.

According to the findings, there is very little digital currency activity in the country. Despite growing acceptance in the region, the ministry noted that digital currencies had limited access to the broader Cyprus economy.

Most local authorities, including the Cyprus Securities and Exchange Commission (CySEC), have “little direct awareness or expertise addressing the specific Money Laundering (ML) and Terrorist Financing (TF) threats of the VA and VASP sectors,” according to the report. Local cops, on the other hand, are said to have gained some firsthand experience and a comprehensive understanding of the virtual asset environment.

The Central Bank of Cyprus and CySEC should revise existing anti-money laundering and counter-terrorist financing instructions to incorporate measures that deal directly with digital currencies in the future, according to the report. To comply with the Financial Action Task Force’s (FATF) recommendations, these directions must include the Travel Rule. For transactions over $1,000, the Travel Rule compels VASPs to exchange sender and recipient identifying information.


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