Read the CySEC Circular C657
Memo #42-2024
CySEC Circular No: C657
Date: 17/09/2024
Subject: FATF’s report titled ‘Status of implementation of Recommendation 15 by FATF Members and Jurisdictions with Materially Important VASP Activity’
Purpose: To bring to the attention of the Regulated Entities a report published by the FATF that includes the implementation status of 58 jurisdictions with FATF Recommendation 15 (New Technologies), as well as their latest assessment rating by MONEYVAL
In Summary:
CySEC has issued the Circular C657 on 17/09/2024 to bring to the attention of Crypto Asset Service Providers (‘CASPs’), Cyprus Investment Firms (‘CIFs’), Administrative Service Providers (‘ASPs’), UCITS Management Companies (‘UCITS MC’), Self-Managed UCITS (‘SM UCITS’), Alternative Investment Fund Managers (‘AIFMs’), Self-Managed Alternative Investment Funds (‘SM AIFs’), Self-Managed Alternative Investment Funds with Limited Number of Persons (‘SM AIFLNP’), Companies with sole purpose the management of AIFLNPs and Small Alternative Investment Fund Managers (‘Small AIFMs’), that the Financial Action Task Force (the ‘FATF’) published on 28/03/2024 a report entitled ‘Status of implementation of Recommendation 15 by FATF Members and Jurisdictions with Materially Important VASP Activity’ (the ‘Report’).
The term Virtual Assets and Virtual Asset Services Providers (VASP) means Crypto Assets and Crypto Asset Services Providers for the purposes of the Circular C657.
The Report includes a table with 58 jurisdictions (all FATF members plus 20 jurisdictions categorized by FATF as having “materially important VASP activity”) setting out the implementation status of the said jurisdictions with FATF Recommendation 15 (New Technologies) as well as their latest assessment rating by MONEYVAL (the ‘Table’).
With this Circular C657, CySEC notes that MONEYVAL’s “3rd Enhanced Follow-up Report” demonstrated the progress that the Republic of Cyprus made in terms of technical compliance with the FAFT Recommendation 15. According to a Press Release issued on 02/05/2024 by the Council of Europe, since November 2022, Cyprus improved the virtual asset service providers regime with only a few minor deficiencies remaining. Cyprus has been re-rated on Recommendation 15 from ‘Partially Compliant’ to ‘Largely Compliant’. CySEC has issued a relevant announcement on 03/05/2024.
With this Circular C657, CySEC points that, in line with the “FATF’s 2021 Updated Guidance for a Risk Based Approach to VASPs”, Regulated Entities should consider the risks of virtual asset transfers with jurisdictions that have not taken steps towards regulating or banning VASPs. Subject to their own ML/TF risk assessment, Regulated Entities may also consider designating VASPs from jurisdictions which do not effectively implement licensing or registration requirements as higher risk and implement appropriate measures to suitably mitigate the increased ML/TF risks.
CySEC also notes that the “FATF’s 2021 Updated Guidance for a Risk-Based Approach to VASPs” was circulated to the Regulated Entities via C476.
With this Circular C657 CySEC urges the Regulated Entities to take duly into account the FATF’s Report and considers the Table to be of assistance to the Regulated Entities engaging or seeking to engage in VA activities, more specifically in understanding the risks of VA transfers and enhancing their risk-based approach under the Prevention and Suppression of Money Laundering Activities Law (L. 188(I) 2007) as amended from time to time.
The FATF report "Status of implementation of Recommendation 15 by FATF Members and Jurisdictions with Materially Important VASP Activity" can be found on the following link:
The MONEYVAL’s 3rd Enhanced Follow-up Report can be found on the following link:
The Press Release issued on 02/05/2024 by the Council of Europe can be found on the following link:
The announcement issued by CySEC on 03/05/2024 can be found on the following link:
The "FATF’s 2021 Updated Guidance for a Risk Based Approach to VASPs" can be found on the following link:
Read the CySEC Circular C657
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