With these guidelines in effect from 4 February 2025, CySEC aims to align its regulatory framework with broader EU practices, ensuring that the members of the management body of issuers of ART and CASPs are suitable for their position.

A unified framework for suitability standards

The adopted guidelines provide the criteria that individuals and entities need to meet when involved in the management and ownership of ARTs and CASPs to align with the stringent suitability standards.

These standards apply at the stage of authorisation and on an ongoing basis, underscoring the importance of consistent governance practices.

Criteria to meet suitability standards

Members of the management body must possess a strong reputation and be able to dedicate adequate time to fulfil their responsibilities effectively. Additionally, there should be an evaluation to ensure that, both individually and as a group, they have the necessary knowledge, skills, and experience to carry out their roles.

None of the management body members must have convictions for offences related to money laundering, terrorist financing, or any other offence that would negatively affect their good reputation.

The joint guidelines also set out the methodology that every competent authority must use to assess situations which give rise to a qualifying holding when assessing the suitability of a shareholder or member that has qualifying holdings in ARTs/CASPs issuers, or of a proposed acquirer of direct or indirect qualifying holdings.

The role of CySEC

CySEC’s adoption of these joint EBA-ESMA guidelines reflects its commitment to bolstering the EU suitability standards within the financial landscape of Cyprus.

Issuers of ARTs, applicant issuers of ARTs, CASPs and applicant CASPs, are encouraged to familiarise themselves with these suitability standards and take proactive steps to ensure compliance, reinforcing trust and stability in the evolving landscape of crypto-asset markets. By adhering to these principles, market participants will play a pivotal role in aligning with the EU’s broader financial regulatory objectives.

CySEC’s announcement can be found here and the joint guidelines can be accessed here.