Cyprus is preparing to strengthen oversight of the cryptocurrency market. A new bill introduces stricter supervisory measures, financial penalties for serious violations, and expanded powers for regulatory authorities.
The bill was submitted to the House of Representatives on October 8, 2026, after being approved by the Council of Ministers on September 10. It is intended to implement the European MiCA regulation at the national level and establish how it will be enforced in Cyprus. The goal of the reform is to increase transparency in the cryptocurrency market, protect investors, and introduce uniform requirements for companies that issue, sell, and provide services related to digital assets.
Why crypto companies could face fines of up to €15 million
One of the key provisions of the bill is increased financial liability for companies and individuals that violate crypto-asset market rules. Under Article 111 of the European MiCA regulation, serious violations involving insider dealing, unlawful disclosure of inside information, and market manipulation may result in fines for companies of at least €15 million or 15% of annual turnover, depending on the applicable method of calculation.
For individuals, European rules also provide for fines of up to €5 million for certain violations related to market manipulation. The €15 million figure is not a universal maximum. Depending on the nature of the violation and the company’s turnover, penalties may be higher.
Other violations, including operating without the required authorization, failing to comply with disclosure requirements, and providing crypto-asset services in breach of the rules, are subject to separate penalties. Depending on the provision violated, fines may be calculated at 3%, 5%, or 12.5% of annual turnover. For certain categories of corporate violations, the European regulation provides for fines of at least €5 million. The size of the penalty will therefore depend on the type of violation and the applicable legal provision.
What powers will Cyprus regulators receive?
Compliance with MiCA rules in Cyprus will be supervised by two authorities: the Central Bank of Cyprus (CBC) and the Cyprus Securities and Exchange Commission (CySEC). Their designation as competent authorities was officially announced by the Ministry of Finance in November 2024. Under the European regulatory framework, supervisory authorities may conduct investigations and inspections, require companies to correct violations, and restrict the activities of firms that fail to comply with the rules. In serious cases, authorization to operate may be suspended or withdrawn. Responsible executives may also face temporary restrictions on holding management positions under certain circumstances.
Regulators will also focus on market manipulation, including actions that create a false or misleading impression of the demand, supply, or price of a crypto-asset. The division of responsibilities between the CBC and CySEC depends on the category of digital asset and the type of activity carried out by the company. In particular, the European regulation sets separate requirements for asset-referenced tokens, e-money tokens, and crypto-asset service providers.
What will change for crypto businesses and investors?
The European MiCA regulation establishes common rules for the issuance of crypto-assets, their public offering and trading, as well as governance requirements for companies providing related services. The main MiCA provisions have applied across the EU since December 30, 2024. Certain requirements covering asset-referenced tokens and e-money tokens have been in force since June 30, 2024.
For businesses in Cyprus, this means having to comply with licensing, disclosure, risk-management, and customer-protection requirements. Companies authorized under MiCA may provide relevant services in other EU countries through the cross-border mechanism established by the regulation, provided that the required procedures are followed. For investors, the purpose of the new rules is to improve market transparency and increase the accountability of service providers. However, regulation does not eliminate market risk: crypto-asset prices can change sharply, and investments do not become guaranteed or risk-free simply because a company is licensed.
When will the law take effect?
The new bill must still be approved by the Cyprus Parliament. Its final provisions may change during parliamentary debate and the amendment process. It is important to distinguish between the MiCA regulation, which is already in force at the European level, and the new Cyprus national bill. The new legislation is intended to establish the necessary enforcement mechanisms and sanctions at the national level rather than introduce European crypto regulation from scratch.
For companies using Cyprus as a base for operations in the European market, compliance with MiCA requirements is becoming one of the key conditions for long-term activity. The main areas of change include stronger supervision, measures against market manipulation, and greater accountability for participants in the crypto industry. Official materials and current requirements are available on the website of the Cyprus Securities and Exchange Commission.