Cryptocurrency Regulation in Cyprus

Cyprus is actively developing its digital economy and creating favorable conditions for activities in the field of cryptocurrencies and blockchain technologies. Thanks to a transparent licensing system and favorable tax policies, the island attracts startups, investors, and tech companies working with digital assets. Registering a cryptocurrency company in Cyprus allows you to conduct legal business within the framework of EU legislation.

If you want to legally operate with cryptoassets in the EU, register a company, obtain a CASP license or optimize taxation, Cyprus can be a beneficial solution..

Can you own cryptocurrency in Cyprus?

Yes, cryptocurrency is fully allowed for individuals. You can:

• Store cryptocurrency in wallets;
• Use international crypto exchanges (e.g., Binance, Kraken);
• Exchange cryptocurrency for fiat (euro) via platforms or P2P;
• Transfer cryptoassets between your own addresses or to third parties.

However, cryptocurrency in Cyprus is not an official means of payment, but its use in commercial and investment activities is not prohibited. This means that you won’t be able to pay with bitcoin directly in a supermarket. Transactions between private individuals or companies are possible by mutual agreement, as a form of barter.

Commercial activity involving cryptoassets (such as exchanges, exchangers, custodians) requires registration in the CASP register of CySEC (more on that below).

How is cryptocurrency regulated in Cyprus?

Currently, there is no separate national law in Cyprus that fully regulates the cryptocurrency market. The regulation of digital assets in Cyprus is carried out in accordance with European Union norms, in particular based on:

• MiCA Regulation (Markets in Crypto-Assets) — this is a pan-European regulation that introduces unified rules for regulating crypto business in the EU. MiCA regulates: token issuance and ICOs; activities of crypto-asset service providers (CASP); obligations related to consumer protection and risk disclosure. In Cyprus, the regulation is expected to come into force by the end of 2025.
• EU AML Directives (AMLD5 and AMLD6) — on combating money laundering and terrorist financing.
• National legislation of Cyprus, including provisions on financial and investment services (CySEC Law).
• The Cyprus CASP Register — mandatory registration of all companies providing cryptoasset-related services.

Role of CySEC: who supervises the crypto sector in Cyprus?

Supervision of the cryptocurrency sector in Cyprus is carried out by the Cyprus Securities and Exchange Commission (CySEC), the national financial regulator subject to EU standards. This authority issues CASP licenses and oversees compliance with MiCA and AML regulations.

If your company provides services such as cryptocurrency exchange, digital asset custody, tokenization, or investment consulting in the crypto sphere, you are required to obtain a CASP license from CySEC. Registration in the CASP (Crypto Asset Services Providers) register allows you to operate legally not only in Cyprus but throughout the European Union.

Conditions for obtaining a CASP license:

• Registration of a legal entity in Cyprus;
• Appointment of local directors and a compliance officer;
• Proof of source of funds;
• Compliance with AML and KYC requirements;
• Physical office in Cyprus.

Read more: everything about registering a company in Cyprus.

Taxation of cryptocurrency in Cyprus

Currently, income from cryptocurrency operations in Cyprus is taxed depending on the structure:

• Individuals — if you are not regularly trading crypto, store it as an asset, and do not generate commercial income, then you are not subject to additional taxes.
• Компанії — taxed at a corporate rate of 12.5% on profits.
• ПДВ — does not apply to transactions involving virtual currencies (per decision of the European Court).

It is important to properly structure the business, determine the status of the assets, and consider international tax treaties. Read more: all about taxes in Cyprus.

Why is Cyprus a beneficial solution for crypto companies?

1. Transparent procedure for company registration and licensing;
2. Legal infrastructure aligned with MiCA, AML, and licensing requirements;
3. Low corporate tax and no dividend tax (for Non-Dom);
4. International banking and legal services.

Learn more: When a Cyprus company brings maximum benefits: key tax advantages

Legal support from Feod Group

Feod Group has been assisting clients in Cyprus since 2007. Our office in Larnaca provides a full range of services:

• Support for company registration and business operations;
• Consultations on MiCA, AML, and taxation requirements;
• Compliance and banking support;
• Licensing and international business structuring.

Contact us to get a personalized consultation!