How Cypriots Use Cryptocurrency Exchanges: Access Methods and Regulations

Ever wondered how people in Cyprus actually get onto crypto exchanges? The answer isn’t a secret tech hack - it’s a mix of clear regulations, simple KYC steps, and a handful of reliable platforms that work across the EU.

Regulatory backdrop you need to know

CySEC is the Cyprus Securities and Exchange Commission, the main watchdog for crypto‑asset service providers (CASPs) on the island. Since the EU rolled out the Markets in Crypto‑Assets (MiCA) rules in June2023, CySEC has been aligning local law with the new framework. By the end of 2024 the transition was complete, meaning any exchange that wants to serve Cypriots must either hold a CySEC‑approved CASP licence or be registered in another EU member state under MiCA.

The impact? You’ll only see exchanges that meet strict anti‑money‑laundering (AML) and counter‑terrorist‑financing (CFT) standards. That’s why you’ll rarely hear about ‘unlicensed’ platforms in local media - they simply can’t operate legally here.

Key entities shaping the crypto scene

• MiCA is the EU-wide regulation that standardises rules for crypto‑assets, licensing, disclosures and consumer protection.
• MOKAS is the Unit for Combating Money Laundering in Cyprus, responsible for receiving suspicious‑activity reports from CASPs.
• Central Bank of Cyprus (CBC) is the national bank that issues public warnings about crypto risks and coordinates AML guidance with other authorities.
• KYC is the ‘Know Your Customer’ process that verifies a user’s identity before allowing higher‑value transactions.
• AML is the set of anti‑money‑laundering procedures CASPs must follow, including transaction monitoring and record‑keeping.
• EU sanctions list is the database of individuals and entities that cannot be dealt with under EU law.

Step‑by‑step: How a Cypriot signs up for an exchange

1. Choose a platform that is either a Cyprus cryptocurrency exchange with a CySEC CASP licence or an EU‑wide exchange that advertises compliance with MiCA.
2. Enter your email and create a strong password. Most platforms now offer two‑factor authentication (2FA) as a default security layer.
3. Complete the KYC check. You’ll upload a government‑issued ID (passport or national ID), a proof‑of‑address document (utility bill or bank statement) and, for transactions over €1,000, a selfie for facial verification.
4. The exchange runs AML screening against the EU sanctions list and the local MOKAS watchlist. If you pass, the account is marked ‘verified’ and you can start funding.
5. Fund the account. The most common payment methods in Cyprus are SEPA bank transfers, local credit/debit cards, and increasingly, e‑wallets like Revolut that support Euro transactions.
6. Start trading or swapping. Most platforms let you buy Bitcoin, Ethereum, and a handful of stablecoins directly with EUR. For more exotic tokens, you’ll usually need to trade on the exchange’s spot market after depositing a major crypto.

Domestic vs. International platforms - what’s the difference?

Why Cyprus’ tax rules matter

Since 2025 Cyprus does not levy capital gains tax on the sale or exchange of crypto‑assets. That means if you buy Bitcoin at €20,000 and sell it later for €30,000, the €10,000 profit isn’t taxed as a capital gain. However, if crypto trading is part of a business activity - say you run a brokerage or a mining operation - ordinary income tax could apply.

Because of the tax‑friendly environment, many Cypriots treat crypto as a long‑term investment vehicle rather than a day‑trading hobby. This influences platform choice: users often pick exchanges that offer robust export tools for easy filing, even though the filing itself is straightforward.

Practical tips and common pitfalls

• Check the CASP register. Before you deposit any money, search CySEC’s online CASP register to confirm the exchange’s licence number.
• Watch out for hidden fees on fiat‑to‑crypto conversions. Some platforms add a markup on the exchange rate that isn’t listed as a separate fee.
• Secure your account with 2FA and, if possible, a hardware security key. Even though CySEC‑licensed exchanges have strong security policies, the first line of defence is still you.
• Keep a backup of all KYC documents. If MOKAS requests a follow‑up, you’ll need the original scans within 30days.
• Stay updated on MiCA amendments. The EU is still fine‑tuning reporting thresholds, and a change could affect how much personal data you need to share.

Future outlook - what’s next for Cypriot crypto users?

With MiCA fully entrenched, the market is expected to see a wave of new services: tokenised real‑estate platforms, decentralized finance (DeFi) gateways that integrate with licensed custodians, and even crypto‑linked insurance products. CySEC’s Innovation Hub is already piloting sandbox projects, so early adopters in Cyprus may get first‑mover advantages.

At the same time, regulators are tightening AML reporting for high‑frequency traders. If you start moving large volumes (over €50,000 per month), expect additional transaction‑monitoring checks and possibly a quarterly compliance review.