Cypriot CySEC is Latest Regulator to Warn about Virtual Currencies - But Still Legal

The Cyprus Securities and Exchange Commission (CySEC CySEC The Cyprus Securities and Exchange Commission (CySEC) is a financial regulatory authority of Cyprus. CySEC is one of the key watchdog authorities for brokerages in Europe, whose financial regulations and operations comply with the European MiFID financial harmonization law.Founded in 2001, CySEC is instrumental in providing licensing and registration for forex brokers and previously binary options providers.CySEC is responsible for a variety of different functions, which includes the supervision The Cyprus Securities and Exchange Commission (CySEC) is a financial regulatory authority of Cyprus. CySEC is one of the key watchdog authorities for brokerages in Europe, whose financial regulations and operations comply with the European MiFID financial harmonization law.Founded in 2001, CySEC is instrumental in providing licensing and registration for forex brokers and previously binary options providers.CySEC is responsible for a variety of different functions, which includes the supervision Read this Term) has issued a public statement today warning investors about the “risks arising from the purchase, possession or trading of virtual currencies, for example the Bitcoin”. The statement though didn’t contain any opinion on the legalities of bitcoins and other virtual currencies as much as warn the public about their risks which include loss of money. The warning was based on a European Banking Authority document that was published in December of 2013 and related similar language as that used by CySEC.

Small Island, Important Player

Besides being the country whose financial crisis triggered an escalation of bitcoin’s value in March 2013 and brought the digital currency into mass media headlines, Cyprus plays an important piece in the current bitcoin landscape. For starters, the country is home to a disproportionate amount of online Forex Forex Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Read this Term brokers due to its inclusion in the EU, low corporate tax rates, and proximity to Russia, Israel, and Gulf Countries. Among brokers headquartered in Cyprus with CySEC financial regulation include Markets.com, Leverate, and eToro which have launched derivative based products for bitcoins called CFDs (more on CFDs). In addition, following reports from a Russian judicial site that they were investigating bitcoin exchange BTC-e, representatives from the firm stated that they weren’t located in Russia, but in Cyprus. As such, despite being a small island, bitcoin regulation in the country could have larger global affects.

Currently though, CySEC has only issued a warning to the public but hasn’t issued a legal opinion on virtual currencies. This contrasts with polices from Russia, where the country’s central bank stated that businesses were prohibited in engaging with bitcoins. Overall, Cyprus appears to be following along with financial opinion from the greater EU. As such, without other major financial regulator bodies taking a negative opinion against bitcoins, Cyprus is expected to remain hands off from limiting the activity of businesses. However, due to ties between Russian and Cyprus, it may not be a coincidence that three days after BTC-e announced they were in Cyprus, CySEC decided to issue a warning. Therefore, the currency warning could be CySEC’s way of alerting firms that they are watching the sector and will intervene to limit the entrance of illegal activities in their country.