We would like to inform you regarding the publication of Circular C756 issued by the Cyprus Securities and Exchange Commission (CySEC), regarding the dual licensing framework applicable to Crypto-Asset Service Providers (“CASPs”) under the regulatory regime of Directive (EU) 2015/2366 on payment services in the internal market (PSD2).

CySEC draws attention to the regulatory considerations applicable to CASPs that may also fall within the scope of PSD2 when providing payment services alongside crypto-asset services.

In this context, CASPs are reminded that certain activities may trigger additional authorisation requirements under PSD2 where services provided qualify as payment services as defined under the relevant EU framework.

CySEC notes that entities operating as CASPs should assess whether their business model involves:

• the execution of payment transactions;
• the issuance or acquisition of payment instruments; or
• the provision of services that fall within the scope of PSD2.

Where such activities are identified, firms may be required to obtain additional authorisation or operate under a dual licensing structure, as applicable.

CySEC further expects Regulated Entities to ensure that:

• appropriate regulatory analysis is performed to determine applicable licensing requirements;
• potential overlaps between CASP authorisation and PSD2 requirements are properly assessed; and
• compliance frameworks are updated accordingly where dual regulatory obligations arise.

For further information or assistance, please do not hesitate to contact us.