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- The bill, submitted to Parliament on 8 October, seeks to implement Cyprus’s national framework for the EU’s Markets in Crypto-Assets Regulation.
- Serious market abuse under MiCA could bring corporate fines of at least €15 million or 15% of annual turnover, and individuals up to €5 million.
- Regulators would gain powers to investigate firms, inspect operations, restrict activities and withdraw authorisations in serious cases.
- CBC and CySEC are Cyprus’s designated competent authorities under MiCA, with the bill providing the national arrangements needed for supervision and enforcement.
Crypto regulation could become stricter under proposed legislation that would strengthen oversight of digital asset businesses and expand the enforcement powers of the Central Bank of Cyprus (CBC) and the Cyprus Securities and Exchange Commission (CySEC).
The Markets in Crypto-Assets Bill of 2026 was submitted to the House of Representatives on 8 October, following Cabinet approval on 10 September. It aims to establish the national enforcement framework for the EU’s Markets in Crypto-Assets Regulation, known as MiCA.
The proposal includes substantial financial penalties for serious breaches, alongside powers to investigate companies, restrict their activities and withdraw authorisations in certain circumstances.
Crypto firms could face multimillion-euro fines
The proposed framework provides for significant penalties for companies and individuals that breach regulatory requirements.
Under Article 111 of MiCA, serious market abuse involving insider dealing, the unlawful disclosure of inside information or market manipulation can result in corporate fines of at least €15 million or 15% of annual turnover, depending on the applicable calculation.
Individuals involved in certain market-abuse violations can face fines of up to €5 million.
However, €15 million is not a universal maximum penalty. The amount applicable depends on the type of infringement and the relevant calculation under the regulation.
Other breaches, including failures relating to authorisation, disclosure requirements and the provision of crypto-asset services, fall under separate penalty provisions. Depending on the violation, corporate fines can be linked to 3%, 5% or 12.5% of annual turnover.
The rules also require regulators to have the power to impose fines of at least €5 million for specified categories of corporate infringements.
Regulators to gain stronger enforcement powers
Beyond financial penalties, the framework provides for investigations, inspections and orders requiring companies to comply with regulatory obligations.
Authorities may also restrict business activities or suspend or withdraw an authorisation to provide crypto-asset services in serious cases.
Individuals responsible for certain violations may face temporary restrictions on holding management positions.
The legislation also addresses market manipulation, including practices intended to create misleading impressions about the supply, demand or price of crypto-assets.
These measures are intended to give regulators more tools to address misconduct and enforce the rules governing the sector.
CBC and CySEC to oversee crypto businesses
The Central Bank of Cyprus and CySEC have been designated as Cyprus’ competent authorities under MiCA, according to a Finance Ministry notification published in November 2024.
Their responsibilities differ according to the type of crypto-asset and activity involved. The CBC has functions relating to certain categories of asset-referenced tokens and electronic money tokens, while CySEC oversees other crypto-asset activities and service providers within its remit.
CySEC has already introduced licensing applications, supervisory guidance and procedures for businesses seeking authorisation under the EU framework.
The proposed legislation would establish the national arrangements needed to support the regulators’ supervisory and enforcement responsibilities.
What the EU rules mean for crypto companies
MiCA sets common requirements for issuing, offering and trading crypto-assets, as well as for the governance and conduct of companies providing related services.
It also establishes specific requirements for stablecoins, including tokens linked to official currencies or other assets, to address risks to consumers and financial stability.
Although MiCA’s main provisions have applied across the EU since 30 December 2024, member states also need domestic arrangements that allow their authorities to exercise the required enforcement powers.
The Cyprus bill addresses this national legislative requirement rather than creating an entirely new European regulatory system.
For companies offering trading, custody and other crypto-asset services, compliance is increasingly important. Businesses authorised under MiCA can provide eligible services across EU member states through the regulation’s cross-border arrangements, subject to the applicable requirements.
This makes the regulatory framework relevant to firms using Cyprus as a base for operations across the European single market.
Bill must pass through Parliament
The legislation will now proceed through the parliamentary process, where its provisions may be scrutinised and amended before it can become law.
Until that process is completed, the bill remains a proposal rather than a fully enacted national framework.
For Cyprus’s crypto-asset industry, the proposed measures place regulatory accountability, investor protection and stronger enforcement at the centre of the next stage of market supervision.
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