Cyprus Crypto Compliance Penalty Calculator
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Under Cyprus regulations, non-compliance with Travel Rule requirements can lead to substantial fines. Input your business details to estimate potential penalties.
Estimated Penalty Details
Enter your business details to see estimated penalties.
Important: Fines can reach up to 10% of annual turnover or âŹ5 million, whichever is higher. All transactions over âŹ1,000 require Travel Rule data capture.
Cyprus has become a hotspot for crypto firms looking to tap into the EU market, but the islandâs banks face a growing set of rules that shape every digitalâcurrency transfer. Understanding the current restrictions, why they exist, and how to stay compliant is essential for anyone dealing with cryptoârelated payments in Cyprus.
What the regulatory framework looks like
Cyprus banking restrictions on crypto transactions are the result of three intertwined layers of legislation:
- The EUâs Markets in CryptoâAssets (MiCA) regulation, fully applicable since late 2024.
- National amendments to the Prevention and Suppression of Money Laundering and Terrorist Financing Law (AML/CFT Law) of 2007, most recently updated in June 2025.
- Sectorâspecific guidance from the Central Bank of Cyprus (CBC) and the Cyprus Securities and Exchange Commission (CySEC).
These pieces form a âharmonised crypto ecosystemâ that protects consumers, deters moneyâlaundering, and still offers a taxâfriendly environment (no capitalâgains tax on crypto sales).
Key authorities and their roles
Central Bank of Cyprus (CBC) does not treat crypto as legal tender, but it sets the bankingâsector guidelines. It requires banks to keep detailed audit trails, screen against EU and UN sanctions lists, and apply enhanced due diligence (EDD) when dealing with selfâhosted wallets.
Cyprus Securities and Exchange Commission (CySEC) is the national competent authority for cryptoâasset service providers (CASPs). All exchanges, custodians and tokenâissuers must register with CySEC, meet minimum capital thresholds, and embed AML/CFT controls.
The European Banking Authority (EBA) supplies the panâEU Travel Rule guidelines that Cyprus has woven into its AML amendments. The European Central Bank (ECB) influences the broader SEPA and instantâcreditâtransfer requirements that will be mandatory for all Cypriot banks by 2027.
Travel Rule and transaction thresholds
Under the 2025 amendment, any cryptoârelated transfer of âŹ1,000 or more triggers the Travel Rule. Banks must capture:
- Sender and receiver names
- Full wallet addresses
- Transaction reference or invoice number
- Timestamp and the underlying crypto asset type
This data must âtravelâ with the payment to the receiving institution, mirroring the requirements for traditional wire transfers. Failure to comply can lead to fines of up to 10 % of annual turnover or âŹ5 million, whichever is higher.
Realâtime beneficiary verification
Since midâ2025, paymentâservice providers (including banks) must perform instant beneficiary checks before completing a cryptoâlinked euro transfer. Eurofastâs pilot data shows an average delay of 15â20 seconds per transaction, a tradeâoff many institutions accept for the added security.
Verification includes:
- Screening the wallet address against sanctionedâentity lists.
- Running AML risk scores based on transaction history.
- Ensuring the counterpart CASP holds a valid CySEC licence.
Compliance checklist for crypto businesses
| Step | What to do | Key reference |
|---|---|---|
| 1 | Register with CySEC and obtain a licence. | CySEC Registration Guidelines (2025) |
| 2 | Implement KYC for all customers, even for walletâonly users. | AML/CFT Law Amendment (2025) |
| 3 | Integrate TravelâRule data capture for âŹ1,000+ transfers. | EBA TravelâRule Guide (2025) |
| 4 | Set up realâtime sanctions screening and EDD for selfâhosted wallets. | CBC Banking Guidelines (2025) |
| 5 | Maintain auditâtrail logs for at least five years. | CySEC Supervision Manual (2025) |
| 6 | Train staff on AML reporting and submit SARs to MOKAS. | MOKAS SAR Requirements (2025) |
Following this checklist reduces the likelihood of a hefty fine and keeps the business eligible for banking services.
How banks are adapting
Traditional Cypriot banks remain cautious. CBC guidance obliges them to:
- Verify that any counterpart CASP holds a valid CySEC licence before opening a corporate account.
- Apply enhanced due diligence on highârisk customers, especially those using selfâhosted wallets.
- Maintain separate internal âcrypto desksâ to isolate risk.
Some banks have launched dedicated cryptoâservice teams, but many still refuse to provide standard business accounts to exchanges unless the firm can prove robust AML controls and a clean sanctions record.
Future outlook - whatâs next?
Three trends will shape the next couple of years:
- Instantâpayment mandate (2027): All banks must support SEPA Instant Credit Transfer (SCTâInst) in euros, speeding up fiatâtoâcrypto settlements.
- National Sanctions Unit (2025): Centralised oversight will tighten sanctions screening, meaning banks will receive automated alerts directly from the unit.
- MiCA harmonisation: Full MiCA compliance will push remaining unregistered CASPs onto the CySEC register, aiming for 95 % of crypto activity to be supervised by 2027.
For businesses, the message is clear: invest in compliance infrastructure now, or risk being left out of the formal banking channel.
Quick compliance cheatâsheet
- Transaction threshold: âŹ1,000 â Travel Rule data required.
- Penalty ceiling: 10 % of annual turnover or âŹ5 M.
- Auditâtrail retention: minimum 5 years.
- Licensing: mandatory registration with CySEC for any cryptoârelated service.
- Sanctions screening: must cover EU, UN, and the new National Sanctions Unit list.
Keep this list handy when you talk to your bank or set up a new crypto service.
Do Cypriot banks charge fees for cryptoârelated transfers?
Fees vary by institution, but most banks apply a standard SEPA fee plus a small surcharge for AML processing. The surcharge usually ranges from âŹ0.50 to âŹ2 per transaction.
Can I use a personal bank account for crypto trading?
Technically yes, but banks are required to conduct EDD on personal accounts that move âŹ1,000+ to selfâhosted wallets. Expect additional documentation requests and possible account freezes.
What happens if a CASP fails the Travel Rule?
The CASP faces a fine of up to 10 % of its annual turnover and may lose its CySEC licence. Banks will also block any further transfers involving that provider.
Is there any tax on crypto profits in Cyprus?
No capitalâgains tax is levied on crypto sales, making Cyprus attractive for traders. However, income derived from cryptoârelated services (e.g., mining, staking as a business) is taxable as regular corporate income.
How can I prove compliance to a bank?
Provide the bank with:
- CySEC licence copy.
- AML/CFT policy documents.
- TravelâRule data logs for recent âŹ1,000+ transfers.
- Recent SAR filings (if any).
Chris Pratt
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