Cyprus is moving towards regulating the cryptocurrency industry, as the country’s Ministry of Finance is publishing a national cryptocurrency risk assessment.

The white paper published on Monday contains the risk assessment of the Republic of Cyprus in relation to the money laundering risks associated with the activities of virtual assets and virtual asset service providers (VASPs).

The Cypriot Ministry of Finance stressed that there is “limited first-hand understanding or experience” regarding the money laundering risks of cryptocurrency in the country.

However, authorities such as the Cyprus Securities and Exchange Commission (CySEC) and local law enforcement agencies have demonstrated a “high level of understanding of the sector,” the statement said. The ministry said authorities should continue to study the market and obtain “in-depth training on these issues” to improve their skills.

The ministry also recommended that local financial companies adopt “written instructions and procedures to comply” with the rule of bank transfer in virtual currency. Meanwhile, the ministry said that the authorities should start storing and exchanging data related to virtual currencies and VASP, adding:

“While the level of activity is currently considered minimal, this would allow for an evidence-based baseline as activity increases, allowing early detection of risks or changes in risk levels.”

The authority noted that Cyprus should actively cooperate with other jurisdictions with expertise in the crypto industry in order to learn from these relationships and identify best practices.

“Such international cooperation can be an important channel for Cyprus to promote and accelerate capacity building in the VA/VASP sector,” the ministry said in a statement.

Related: Israel allegedly adopts new anti-money laundering rules for cryptocurrency

Cyprus, one of the most unsafe countries in the world when it comes to regulating cryptocurrency, adopted the rules regarding cryptocurrency this year. In September, it was reported that CySEC revealed new details about its crypto-regulatory guidelines and plans to increase the number of cryptocurrencies by incorporating EU anti-money laundering legislation into Cypriot law.

According to social media posts, the Cypriot crypto ecosystem is fraught with a great deal of uncertainty as some major financial institutions, including the Bank of Cyprus, have reported blocking Bitcoin (BTC) related transactions this year.

Source: CoinTelegraph