Money laundering is now apparently being taken seriously by CySEC against the backdrop of Western sanctions in connection with the Russian invasion of Ukraine. This week, CySEC announced that it has decided to withdraw the Cyprus Investment Firm (CIF) license of Stone Edge Capital Ltd. The (former) CIF’s website claims that the license would have been voluntarily resigned. However, this cannot be read in the CySEC decision.
The CySEC reached the decision to withdraw the CIF license, as the company did not comply with the following:
- section 22(1) of Law 87(I)/2017 due to the Company’s non-compliance with the licensing condition set out in section 17(6) of the Law 87(I)/2017, as further elaborated in section 17(7)(a) of the said law and section 76 of the Regulation 2017/565 (organizational requirements).
- section 58(e) of the Prevention and Suppression of Money Laundering and Terrorist Financing Law of 2007, as it was in force (the ‘Law 188 (I)/2007’) and paragraph 26 of CySEC’s Directive of Prevention and Suppression of Money Laundering and Terrorist Financing Law, as it was in force, due to failing to apply adequate and appropriate systems and procedures in relation to the thorough examination of any transaction which is considered by its nature to be particularly susceptible to be linked to money laundering or terrorist financing offences and in particular complex or unusually large transactions and all unusual types of transactions carried out without an apparent economic or clear legal justification.
- section 58(c) of the Law 188(I)/2007, as it did not apply adequate and appropriate systems and procedures regarding the internal reporting and reporting to MOΚAS, since its systems and procedures did not comply with the provisions of section 69(1)(a) of the said law.
Due to the withdrawal of Stone Edge Capital’s authorization, the company has to return all client funds, resolve all client complaints and stop providing investment and ancillary services.
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