The Cyprus Securities and Exchange Commission (CySEC) has made an announcement regarding the Investors Compensation Fund (ICF) and the withdrawal of membership status for Leverate Financial Services Ltd.

Revoking CIF Authorization and ICF Membership

According to CySEC, the withdrawal of ICF membership for Leverate Financial Services Ltd. does not imply the loss of rights for covered clients to receive compensation for investment operations conducted up until the point of membership status loss. The conditions for compensation outlined in the Directive remain applicable.

The decision to withdraw ICF membership has followed CySEC 's move to revoke the Cyprus Investment Firm authorization of Leverate Financial Services Ltd. Following the company's voluntary renunciation of its authorization, CySEC withdrew CIF authorization on December 4, 2023. This barred Leverate Financial Services Ltd from operating under CySEC's oversight. No judicial review was mentioned, implying finality pending legal developments.

CySEC's Annual Report: Compliance Measures and Regulatory Priorities

In 2023, CySEC conducted inspections totalling over 700 on-site and remote checks on supervised entities, imposing fines exceeding $2.2 million to ensure regulatory compliance and safeguard investors, as reported by Finance Magnates. Thematic audits focused on entities affected by the Russia-Ukraine sanctions, scrutinizing their business relationships and investigating forced transfers of Russian securities.

The Market Surveillance and Investigations Department completed 42 investigations, with one case forwarded to the Attorney General for potential criminal prosecution, while ongoing inquiries numbered 48 by year-end. CySEC imposed administrative penalties amounting to approximately €2.2 million, with a single investment firm bearing €1 million.

Over three years, €6 million in sanctions have been levied, predominantly against investment firms for regulatory violations. By comparison, the Financial Conduct Authority in the UK revoked licenses for 1,266 unauthorized firms and issued record fines of £52,802,900, while U.S. regulators imposed fines exceeding $9 billion collectively. CySEC also instructed entities to rectify issues in 103 instances, with 35 entities mandated to comply with anti-money laundering and counter-terrorist financing laws.

Additionally, CySEC revoked or suspended licenses for 19 investment firms and two collective investment undertakings. In an exclusive interview, CySEC's Chairman, George Theocharides, highlighted cryptocurrencies and artificial intelligence as paramount regulatory concerns, anticipating their transformative impact on the financial industry.