Revolut launches crypto trading under CySEC licence

abdelaziz Fathi

The Cyprus Securities and Exchange Commission (CySEC) has granted its authorization to Revolut, allowing the fast-growing fintech to launch its cryptocurrency service. The move comes even as the financial markets regulator is mulling over the need for additional rules on retail crypto trading.

Revolut

Revolut, which is valued at $33 billion, says it will allow users to buy, hold and sell over 80 tokens through its app in “a responsible manner” and help them understand the risks involved. Its platform charges a 2.5% transaction fee for “standard” customers and 1.5% fee for “premium” and “metal” customers.

“We welcome the EU-wide regulation and wholeheartedly embrace the European Parliament’s clear intention to support innovation whilst requiring strong customer protection measures to prevent any type of market abuse. In establishing a hub for our crypto operations in the EU, we recognise that CYSEC has in-depth knowledge of crypto and its efforts to be a leader in crypto regulation,” a spokesperson for Revolut said.

The Cypriot licensing requires the firm to adhere to strict financial standards under the MiFID II framework, including the segregation and protection of client funds, full transparency of its business operations and capital adequacy controls.

Operating under the CySEC umbrella allows Revolut to leverage its new regulatory profile to expand its services into the 27 European markets. Launching a service under the CySEC license will also provide users with a regulated platform to work with digital asset-based derivatives.

Cyprus introduces regulatory framework for cryptos

The CySEC has been trying to increase oversight of cryptocurrencies and related assets by integrating EU anti-money-laundering rules into the Cypriot laws.

A policy statement issued in 2021 sets out detailed requirements for crypto firms seeking registration in the regulator’s CASP register. This register is publicly accessible and include information such as the crypto firm’s name, the legal form, its address and services.

The policy also introduced a definition for crypto assets that slightly extends beyond its traditional legal status.

Depending on their structure, the Cypriot regulator says crypto assets may qualify as financial instruments under the Investment Services and Activities and Regulated Markets Law. Additionally, while cryptocurrencies cannot be regarded as legal tender, they may qualify as “electronic money” or “e-money” in the sense of the Electronic-Money Directive.

Meanwhile, the CySEC went beyond the requirements set out in the fifth directive as it wants to bring new activities, which are not included in AMLD5, under the AML/CFT obligations.

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