MiCA compliance is becoming a key priority for crypto businesses operating in Cyprus as the Cyprus Securities and Exchange Commission (CySEC) launches a public consultation on a proposed Directive that would require Crypto-Asset Service Providers (CASPs) to submit financial and prudential reporting data.
The initiative follows an earlier CySEC survey on the costs and reporting obligations associated with the Markets in Crypto-Assets Regulation (MiCA). Stakeholders have until January 12, 2026, to submit feedback via email in Word format, indicating whether they are responding as individuals, companies, or representative organizations.
#New Reporting Obligations for CASPs
Under the proposed framework, authorized CASPs will be required to provide regular financial and prudential reports in line with MiCA compliance requirements. The reporting package will include audited annual financial statements, trial balances, balance sheets, and profit and loss accounts, ensuring greater transparency and regulatory oversight across the crypto sector.
The frequency of reporting will depend on the CASP category. Category 1 providers will submit reports annually, while Category 2 and Category 3 firms will be required to report quarterly. Where audited financial results differ from previously submitted figures, companies will have five months after the end of the financial year to submit updated information.
#CySEC Reviews MiCA Applications and Industry Risks
According to CySEC Chairman Dr. George Theocharides, the regulator is closely reviewing several applications from firms seeking authorization under the European crypto regulatory framework. Crypto businesses, including well-known market participants such as Revolut and eToro, undergo detailed assessments before receiving approval to operate as licensed CASPs.
Theocharides also noted that CySEC is monitoring the use of artificial intelligence within investment firms and remains focused on emerging risks linked to stablecoins and proprietary trading activities. These areas continue to attract regulatory attention due to their potential impact on financial stability.
At the same time, the regulator is increasing its efforts to combat investment fraud and ensure that financial promotions, including those made by finfluencers, comply with European regulatory standards.
#Stronger Regulatory Oversight for Cyprus Financial Firms
The proposed reporting framework reflects the broader push toward enhanced MiCA compliance and regulatory supervision across Cyprus's financial sector. CySEC has intensified its oversight of investment firms, funds, and crypto-asset service providers, carrying out more than 850 supervisory inspections in 2024, imposing €2.76 million in fines, and revoking multiple licenses.
Alongside MiCA, several major European regulatory initiatives—including DORA, AIFMD II, and the EU AML Package—are expected to reshape compliance obligations and investor protection standards.
Despite stricter supervision, Cyprus continues to attract financial services firms. More than 80 new companies received authorization during 2024, while a growing number of crypto businesses are pursuing licensing and regulatory approval under the evolving MiCA framework.
Preparing for MiCA is no longer just about obtaining a license – it also requires meeting ongoing reporting, governance, and compliance obligations.