How Cypriots Access Cryptocurrency Exchanges in 2025

• By JayKay Sun
• 2 May, 2025
• 19 Comments

Ever wondered how people living on the sunny island of Cyprus actually buy, sell, and trade digital coins? The answer isn’t a magic button - it’s a mix of local regulations, EU rules, and a handful of practical steps. Below you’ll find a clear roadmap that takes you from the moment you decide to dip your toes in crypto to the point where you’re safely trading on a compliant exchange.

TL;DR - Quick Takeaways

• Crypto is legal in Cyprus, but exchanges must be licensed by CySEC or hold an EU MiCA licence.
• KYC is mandatory for transactions over €1,000; a passport or ID card and proof of address are enough.
• Capital gains on crypto are tax‑free for individuals, making trading attractive.
• Choose between domestic CASP‑licensed platforms and EU‑wide exchanges that operate under MiCA.
• Always check the provider’s AML compliance and keep records for at least five years.

Regulatory Landscape in a Nutshell

Cyprus follows the EU’s Markets in Crypto‑Assets (MiCA) regulation, which became enforceable in June2023 and sets a uniform set of rules for crypto‑asset service providers across the bloc. The island’s own watchdog, the Cyprus Securities and Exchange Commission (CySEC) oversees licensing, AML supervision, and consumer protection for crypto firms operating locally, acts as the conduit for MiCA compliance.

Because Cyprus is an EU member, any exchange licensed under MiCA can legally serve Cypriot residents without a separate national permit. However, the CySEC Innovation Hub still prefers that services targeting the local market obtain a Crypto‑Asset Service Provider (CASP) licence which certifies that the firm meets Cyprus‑specific AML, CFT, and consumer‑protection standards.

Who Regulates What?

The crypto ecosystem in Cyprus involves several authorities:

• CySEC issues CASP licences, conducts market surveillance, and coordinates with EU regulators.
• Central Bank of Cyprus (CBC) issues public warnings about crypto risks and clarifies that digital tokens are not legal tender.
• MOKAS the Unit for Combating Money Laundering, receives suspicious activity reports from licensed exchanges and enforces AML/CFT rules.
• European Banking Authority (EBA) sets EU‑wide AML guidelines that CySEC implements locally.

Step‑By‑Step: Getting on a Crypto Exchange

1. Pick a licensed platform. Look for the CASP register on the CySEC website or verify that the exchange displays a valid MiCA licence number. Popular choices include local firms like CyCrypto Exchange (fictional example) and EU‑wide platforms such as Binance, Kraken, and Bitstamp that have secured MiCA authorisation.
2. Open an account. Provide your full name, Cypriot ID number, and a recent utility bill. The KYC process is streamlined: a scanned passport or identity card plus a proof‑of‑address document satisfies the €1,000 threshold.
3. Complete AML checks. The exchange will run you through sanctions screening (EU and UN lists) and may ask for the source of funds if you plan to deposit more than €10,000 in a single month.
4. Link a payment method. Most Cypriot users prefer SEPA bank transfers because they are cheap and instantly recognised by EU‑based exchanges. Credit‑card deposits are also available, but they attract higher fees and stricter limits.
5. Deposit crypto or fiat. After the account is verified, move funds from your bank or another wallet. Keep a screenshot of the transaction - MOKAS expects a five‑year audit trail.
6. Start trading. Use the exchange’s spot market, futures, or staking features as you wish. Remember that any profit is considered a capital gain, which is tax‑free for individuals in Cyprus.

Domestic vs. EU‑Wide Exchanges - What’s the Difference?

Tax Implications - Why Cyprus Is Attractive

As of 2025, the Cyprus Tax Department treats crypto‑related gains the same way it treats capital gains from stocks or real estate - they are exempt for private individuals. That means if you bought Bitcoin for €5,000 and sold it for €8,000, you keep the €3,000 profit without filing a capital‑gains return.

There are two caveats:

• If you trade as a professional (i.e., you run a crypto‑trading business), the income may be classified as business profit and taxed at the standard corporate rate.
• Any interest earned from staking or lending is considered ordinary income and is subject to the 12.5% corporate tax if you receive it through a company structure.

For most retail users, the simple rule is: no capital‑gains tax on personal crypto trades. Keep a spreadsheet of purchase dates, amounts, and sale proceeds - it’s useful if the tax authority ever asks for documentation.

Security Tips - Staying on the Right Side of Regulators

• Only trade on platforms listed in the CySEC CASP register or with a valid MiCA licence number.
• Enable two‑factor authentication (2FA) on every exchange account.
• Use a hardware wallet for long‑term storage; keep the seed phrase offline.
• Download statements regularly and store them in an encrypted folder - MOKAS can request them within 30days of a suspicious‑activity report.
• Beware of “unlicensed” peer‑to‑peer services; they lack AML oversight and can lead to frozen assets.

Common Payment Methods Used by Cypriots

Because the Euro is the official currency, most Cypriots rely on SEPA bank transfers. The average deposit size is €2,500, which comfortably clears the €1,000 KYC threshold. Credit‑card deposits are typically limited to €5,000 per month and carry a 3‑4% fee.

For higher‑value traders, the preferred route is a wire transfer to an EU‑based exchange’s escrow account, followed by a swift conversion to stablecoins (USDT, EURS) before entering the spot market. This method reduces conversion fees and speeds up settlement.

Future Outlook - What’s Coming Next?

MiCA’s full national transposition is expected to be finalised by the end of 2025, bringing a few changes:

• Standardised disclosure templates for all crypto‑asset offerings.
• Higher capital requirements for custodial services, which may push smaller local exchanges to merge or partner with larger EU players.
• Potential introduction of a “crypto‑sandbox” where startups can test innovative products under temporary regulatory relief.

For everyday users, the landscape will stay familiar - you’ll still sign a KYC form, link a bank account, and trade on a compliant platform. The main benefit will be clearer consumer protection rules and a more consistent set of fees across the EU.

Frequently Asked Questions

Do I need a CySEC licence to trade on a foreign exchange?

No. If the foreign exchange holds a valid EU MiCA licence, it can legally serve Cypriot residents without a separate CySEC licence. However, you should verify the MiCA licence number on the platform’s compliance page.

What documents are required for KYC?

A government‑issued ID (passport or identity card), a recent utility bill or bank statement showing your Cypriot address, and, for large deposits, a source‑of‑funds declaration (e.g., salary slip or sale agreement).

Are crypto profits really tax‑free?

For private individuals, yes - capital gains from buying and selling crypto are exempt from tax in Cyprus. The exemption does not apply to professional trading income or staking rewards earned through a company.

Can I use a credit card to fund my exchange account?

Most exchanges accept credit‑card deposits, but fees are higher (3‑4%) and limits are lower (usually €5,000 per month). For larger amounts, a SEPA bank transfer is cheaper and faster.

What happens if an exchange is not licensed?

Unlicensed platforms are not subject to AML or consumer‑protection rules, meaning your funds could be frozen or lost without recourse. MOKAS will also flag transactions with such providers, which could lead to investigations.