The Cyprus Securities and Exchange Commission (CySEC) recently published a report on the ongoing activities of its Innovation Hub, a cooperative entity which was launched in October 2018 as a platform for engagement between CySEC and entities operating in the fintech and regtech sectors.
Nineteen different companies has a direct engagement with the network, nine of which included ventures using blockchain. Other firms included several ventures that use distributed ledger technology (DLT) to pass and validate ownership of financial instruments, trading facilities that operate using blockchain, and a venture capital fund that invests in virtual currency startups.
The Hub aims at facilitating the sharing of knowledge between regulators and innovators, promoting the development of regulations that promote innovation and ensuring compliance within dynamic and emerging tech industries. It also engages with third parties seeking to participate in emerging financial innovations, including law firms, credit institutions and educational establishments.
CySEC Chairwoman Demetra Kalogerou describes the Hub as seeking to improve investor rights “by embracing new innovations in financial and regulatory technology,” adding that the regulator’s goal is to “create a robust ecosystem in which fintech firms can flourish responsibly in Cyprus.”
Cyprus Has No Regulations For Blockchain Activities
Despite efforts by the regulator to reinforce innovation in the DLT sector, activities involving cryptocurrencies continue to be an unregulated activity within the country.
Kalogerous said, in a recent interview, the agency is still “evaluating the risk and benefits of crypto innovation to determine whether further actions and legislative requirements are needed to ensure full investor protection.”
CySEC has recently issued alerts about three illegal forex traders and crypto-currency brokers targeting Cypriots. CySEC accuses Naga Markets, CALIBUR CAPITAL and IcFxMarkets of unlawfully working within Cyprus, adding that the companies were fraudulently claiming to have affiliations with organizations controlled within the jurisdiction.
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