CySEC to Conduct On-Site Inspections of Crypto Custodians in EU-Wide Resilience Review
The Cyprus Securities and Exchange Commission (CySEC) is gearing up to conduct on-site inspections of crypto custodians as part of a broader EU-wide initiative. This effort aims to assess the digital operational resilience framework of these firms, particularly in regards to custody functions.
CySEC will be evaluating a representative sample of local entities that hold necessary licenses for custody operations. The reviews are aligned with the 2026 Common Supervisory Action organized by the European Securities and Markets Authority (ESMA).
The primary goal is to determine the strength of each firm's digital operational resilience framework as it applies to custody functions. Key areas under scrutiny include governance structures, internal control systems, secure management of storage solutions and cryptographic keys, transaction controls, incident detection and response procedures, smart contract safeguards, and risks related to reliance on external service providers.
The exercise reflects broader European supervisory priorities that emphasize digital operational resilience and the crypto-asset sector. By coordinating these reviews, authorities aim to promote greater uniformity in oversight practices across the rapidly developing digital asset market.