Fintech 2026

CYPRUS Law and Practice Contributed by: Angelina Fitoz, Svetlana Remezova, Darya Averyanova and Sude Dogan, Lawitt Buro

Crowdfunding Platforms Equity and debt crowdfunding platforms are regulated under EU Regulation 2020/1503 and supervised by CySEC, with tailored investor protection requirements. 6.2 Regulation of Different Asset Classes In Cyprus, regulation is asset-based, not technology- based, distinguishing financial instruments, crypto- assets and electronic money tokens. Financial Instruments (Including Security Tokens) If a digital asset qualifies as a financial instrument, MiFID II applies. Trading must occur on authorised venues, and providers must comply with prospectus, best execution, market abuse and investor protection rules. Classification follows substance over form. Crypto-Assets (MiCA Regime) Crypto-assets that are not financial instruments fall under the Markets in Crypto-Assets Regulation, which distinguishes asset-referenced tokens, electronic money tokens and other crypto-assets. Issuers must publish a White Paper, and platforms must meet gov - ernance and safeguarding standards. Electronic Money Tokens Stablecoins qualifying as electronic money tokens are supervised by the Central Bank of Cyprus under the Electronic Money Law, alongside MiCA requirements. Tax Treatment (From 1 January 2026) Disposal of crypto-assets is subject to a flat 8% tax, while security tokens remain subject to 15% corpo - rate tax or capital gains rules, depending on structure. 6.3 Impact of the Emergence of Cryptocurrency Exchanges The growth of crypto exchanges has brought crypto markets firmly within the Cypriot regulatory perimeter. Centralised Exchanges (CEXs) Initially registered with CySEC, CEXs are now fully licensed under MiCA. They must meet governance, capital and market abuse standards similar in intensity to traditional investment firms.

transactions. EU sanctions rules apply directly and must function effectively even in instant-payment set - tings. Consumer Transparency Firms must clearly disclose fees and currency con - version mark-ups before execution. Adoption of ISO 20022 improves data quality, supporting AML checks From 1 January 2026, certain cross-border payments may trigger withholding tax or non-deductibility where paid to low-tax or EU blacklisted jurisdictions, increas - ing tax-residency verification requirements. 6. Marketplaces, Exchanges and Trading Platforms 6.1 Permissible Trading Platforms Cyprus recognises multiple trading venue types, with regulation based on the instrument traded and plat - form structure, aligned with MiFID II/MiFIR and MiCA. Regulated Markets (RM) The Cyprus Stock Exchange is the only regulated market and operates under MiFID II rules, with strict listing, transparency and market abuse requirements. Multilateral Trading Facilities (MTF) MTFs also fall under MiFID II but have more flexible admission standards. The Emerging Companies Mar - ket operates as an MTF for smaller issuers. Organised Trading Facilities (OTF) and reducing processing errors. Defensive Tax Measures (2026) OTFs mainly cover non-equity instruments (eg, bonds, derivatives) and allow limited operator discretion, sub - ject to transparency and conflict rules. Crypto-Asset Platforms Platforms trading non-security crypto-assets must be authorised as CASPs under MiCA and comply with governance, safeguarding and market integrity stand - ards.

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