Nicosia, Cyprus. The Cyprus Securities and Exchange Commission has warned regulated financial firms to strengthen anti-money laundering controls following the end of the European Union’s transition period under the Markets in Crypto-Assets Regulation on July 1, 2026. The regulator cited new guidance from the EU Authority for Anti-Money Laundering and Countering the Financing of Terrorism on risks emerging as the crypto-asset market adjusts to the new framework.
MiCA authorisation requirement
In a circular issued this week, CySEC said firms wishing to continue providing crypto-asset services within the European Union must now be authorised as MiCA-compliant Crypto-Asset Service Providers following the end of the transition period.
Expected market changes
CySEC said the end of the transition period is expected to trigger significant structural changes across the EU crypto-asset sector, as unauthorised virtual asset service providers leave the market and their customers either close their accounts or transfer to authorised providers.
Risks identified by AMLA
According to the circular, AMLA warned that these changes could create heightened money laundering and terrorist financing risks if firms do not maintain appropriate safeguards during the transition.
Risk-based customer acceptance
CySEC said AMLA recommends that authorised firms adopt a risk-based approach when accepting customers from unauthorised providers rather than refusing them automatically. Firms should carry out individual risk assessments and implement customer due diligence measures proportionate to the level of risk presented by each client, instead of applying blanket de-risking measures.
Wind-down controls for exiting firms
The circular also highlighted risks faced by firms exiting the market. CySEC said unauthorised providers could experience weakened anti-money laundering and counter-terrorist financing controls during the wind-down process, particularly where deficiencies had already been identified in their compliance frameworks. To reduce these risks, the regulator said firms should implement robust and well-documented wind-down plans where required under national legislation.