CySEC Targets Crypto Custodians with On-Site Inspections
The Cyprus Securities and Exchange Commission (CySEC) is set to launch on-site inspections and desk-based reviews of authorized crypto asset service providers starting in the second half of 2026 through mid-2027. This move is part of a broader European effort to strengthen operational resilience in digital asset custody.
CySEC chairperson George Theocharides said that the regulator will execute on-site and desk reviews on a sample of firms from H2 2026 to H1 2027, targeting authorized crypto custodians. The inspections will focus on key operational risk areas, including governance and control frameworks, as well as distributed ledger technology.
The aim is to assess the maturity of these firms' operational security and technical infrastructure, with particular attention to risks tied to distributed ledger technology. CySEC said that the supervisory reviews will examine governance and control frameworks, key management, wallet storage and access controls, transaction controls, monitoring and incident response, smart contract security, and third-party risk management.