MiCA Transitional Arrangements for Existing Cyprus Crypto Firms

Firms that were already providing crypto-asset services in Cyprus before MiCA’s application date were not required to cease trading overnight. Instead, MiCA and the related CySEC guidance set out transitional arrangements allowing existing providers to continue operating while their CASP application is assessed, provided they apply within the timeframes set by the regulator.

Understanding the Grandfathering Window

Under the transitional regime, entities that were validly providing crypto-asset services under applicable national law before 30 December 2024 could continue to do so for a defined period, provided they submitted a CASP application before the relevant deadline. CySEC has issued reminders to existing providers regarding these deadlines, and firms that miss them risk having to cease crypto-asset activities until authorisation is obtained.

Practical Implications

Firms relying on the transitional regime should not treat it as an indefinite extension. Regulators across the EU have made clear that the grace period is intended to allow an orderly transition to full MiCA authorisation, not to permit continued unregulated operation. Firms should treat the transitional window as a fixed runway for completing a full CASP application, including governance upgrades, capital arrangements and policy documentation.

Risks of Delay

Beyond the risk of having to pause operations, late applicants may find themselves competing for regulatory attention with a large number of other firms racing to meet the same deadline, which can extend review times considerably. Early engagement with CySEC and thorough preparation materially improve the chances of a smooth transition.

Enalian advises crypto-asset businesses, investment firms and payment institutions on MiCA authorisation, notification and ongoing compliance in Cyprus. If you are planning a CASP application or reviewing your regulatory status, our team can guide you through the process. Get in touch with our team to discuss your specific circumstances.

This article is provided for general informational purposes only and does not constitute legal, tax or regulatory advice. Regulatory requirements are subject to change; readers should seek specific advice on their circumstances before taking action.