Update Feb. 29, 02:30 EST: A previous version of this article stated that the Cyprus Securities and Exchange Commission (CySEC) posted a warning notice against NAGA Markets for being unauthorized to target Cypriots. This information is false as CySEC has issued a warning notice against the unauthorised domain naga-markets.online. NAGA Markets Ltd is regulated by CySEC and is not connected to naga-markets.conline in any way.
The Cyprus Securities and Exchange Commission (CySEC) recently published a report discussing the ongoing activities of its Innovation Hub — a cooperative entity that was launched in October 2018 as a platform for engagement between CySEC and entities operating in the fintech and regtech sectors.
Nineteen different companies directly engage with the platform, nine of which comprised projects utilizing blockchain. Among these companies were several projects using distributed ledger technology (DLT) to transfer and verify ownership of financial instruments, trading facilities that operate using blockchain, and a venture capital fund investing in virtual currency startups.
The Hub is intended to facilitate knowledge-sharing between regulators and innovators, promote the development of regulations that foster innovation, and ensure compliance within dynamic and emerging tech industries. It also engages with third parties seeking to participate with emerging financial innovations, including law firms, credit institutions, and education institutions.
In a press release, CySEC Chairwoman Demetra Kalogerou describes the Hub as working to strengthen investor protections “by embracing new innovations in financial and regulatory technology,” adding that the regulator’s mission is to “create a robust ecosystem in which fintech firms can flourish responsibly in Cyprus.”
Cryptocurrency activities remain unregulated in Cyprus
Despite the regulator’s efforts to foster innovation within the DLT sector, activities involving cryptocurrencies remain an unregulated activity within the country.
In a recent interview, Kalogerous said the agency is still “evaluating the risk and benefits of crypto innovation to determine whether further actions and legislative requirements are needed to ensure full investor protection.”
The chairwoman added that CySEC does not wish to act prematurely, as its principal mission is to prevent “any dislocation in an otherwise smooth functioning […] capital market.”
CySEC recently published warnings regarding three unauthorized forex and cryptocurrency brokers targeting Cypriots. CySEC accuses naga-markets.online, caliburcapital.net, and icfxmarkets.com of operating illegally within Cyprus, noting that the companies fraudulently claimed to have affiliation with entities regulated within the jurisdiction.
CySEC partners with London university on blockchain project
Cyprus’ securities regulator recently partnered with the University College London’s Blockchain Technology for Algorithmic Regulation and Compliance (BARAC), which researches applications for blockchain technology in automating compliance and regulatory procedures.
Through the project, CySEC is currently investigating technical, legal, and managerial applications of DLT in the services industry.
In 2019, Cyprus’ cabinet published its National Strategy on Distributed Ledger Technologies. The cabinet sought to provide a platform for both public and public-private initiatives employing blockchain applications.
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