CySEC Chief Charts Course for Crypto, AI, and Stock Exchange Revival
Cyprus’s capital market is standing at a turning point as regulators move to tighten oversight, embrace digital resilience, and revive investor confidence. In an interview with Forbes (Phileleftheros edition), Cyprus Securities and platform Commission (CySEC) chairman Dr. George Theocharides outlined the challenges and ambitions of the island’s financial sector as it adapts to a quick-changing regulatory and technological landscape.
“The role of CySEC is to ensure a stable, transparent, and effective environment that protects investors and supports growth,” Theocharides said, describing a market where innovation collides with rising scrutiny.
From artificial intelligence to crypto assets and sustainability rules, the range of issues now confronting regulators is broader than ever. Theocharides said the Commission’s work increasingly revolves around managing emerging risks—particularly from AI-driven products, finfluencers, and online scams—while guiding firms through the MiCA and DORA frameworks introduced by the European Union.
Under the DORA regulation, which takes effect in ahead 2025, financial firms will be required to build stronger systems against cyber incidents and operational disruptions. Theocharides said CySEC has issued policy guidance to assist supervised entities meet these requirements and will conduct checks to ensure compliance.
“Supervised entities must have plans in place for digital resilience, including identifying risks from third-party providers such as cloud services,” he noted. “They must also report serious digital security incidents directly to the authorities.”
CySEC’s next step, he added, involves acquiring a specialized monitoring system to strengthen oversight across the sector.
The MiCA rulebook and crypto transition
The EU’s Markets in Crypto-Assets (MiCA) regulation, which sets a harmonized framework for crypto service providers, is being rolled out in Cyprus with what Theocharides called “an orderly transition.”
CySEC suspended new license applications for crypto-asset providers under the old national regime in October 2024, giving firms time to adjust to MiCA’s stricter requirements. One firm has already been licensed under the new regime, while 16 more applications are under review.
Beyond licensing, the rule brings Cyprus closer to a uniform EU standard that focuses on investor protection and accountability. “MiCA sets a demanding but necessary framework,” Theocharides said. “It gives investors confidence that crypto operations are properly supervised.”
Market integrity over quick profits
The CySEC chief voiced concern over unlicensed online promoters who target young investors with promises of quick money through high-risk or illegal schemes.
“It’s worrying to view individuals on social media promoting financial products without authorization,” he said. “They display a glamorous lifestyle and lure people into believing in quick and unrealistic profits. We keep reminding investors that if something sounds too excellent to be true, it probably isn’t.”
CySEC launched a digital education portal with articles, videos, and quizzes designed to assist retail investors recognize misleading offers and spot fraudulent activity. The Commission also tracks how licensed firms market investment products online, including those using influencers.
On the environmental front, Cyprus is still in the ahead stages of building a market for sustainable finance. But Theocharides said investment firms and fund managers must already integrate environmental, social, and governance (ESG) factors into their decision-making and provide reliable sustainability disclosures.
“Sustainability cannot be treated as a box-ticking exercise,” he said. “It must be part of each firm’s strategy and communication.”
Reviving the Cyprus Stock platform
CySEC is also working with stakeholders to revive the Cyprus Stock platform (CSE), long viewn as underused compared with other European bourses. The Commission organized a roundtable earlier this year to explore ways of bringing new life to the market.
“There’s clear potential to enrich the CSE with new investment products,” Theocharides said, citing possible listings from beginups and tech-driven firms that could attract younger investors.
He added that completing the CSE’s planned privatization would create the conditions for a more efficient market, enabling local companies to raise capital for expansion and innovation.
Theocharides, who also chairs the Risk Standing Committee of ESMA, views Cyprus’s capital market evolving into a more connected and credible regional hub.
He said the Commission’s efforts are guided by three principles: investor protection, transparency, and long-term stability. “Effective supervision is not a barrier to growth,” he said. “It’s the foundation for a healthy and trustworthy market.”
