Demetris Syllouris had initially decided to stay on as speaker but abstain from his duties until investigations ran their course.
Syllouris, who had a 28-year record of service as a lawmaker, said Thursday he had not wanted to quit because it would appear as if he was guilty.
“I maintain my resolute conviction that I did not violate the law in any way,” he said in a statement.
The scandal erupted after news outlet Al Jazeera’s investigative unit used hidden cameras to show Syllouris and others promising to a man posing as a representative for the Chinese investor to find ways of skirting Cyprus's rules on buying citizenship.
Under Cyprus's “golden passport” program, a foreigner can get citizenship by investing at least 2.5 million euros ($2.93 million) in the country. Such programs, which exist in several small EU countries, have raised broad concern about money laundering and other crimes.
In the news report, Syllouris allegedly agreed to help the fictitious Chinese man even though he had a money laundering conviction against him.
The report caused a public outcry and the Cypriot government announced that the “golden passport” program would be scrapped on Nov. 1.
The sting also implicated a veteran lawmaker, a high-profile lawyer, real estate agents and others.
The lawmaker, Christakis Giovanis, on Tuesday resigned his parliamentary seat and quit his duties as a member of the communist-rooted AKEL party.
Giovanis and lawyer Andreas Pittadjis strongly denied the allegations, saying they were fully aware that the whole thing was bogus and they only played along to extract more information in order to file a report with Cypriot law enforcement.
Cyprus’ attorney-general has ordered an “in-depth police investigation” to determine if any criminal acts had been committed.
People took to social media to voice their "disgust” and “shame” over the news report's revelations. On Wednesday, hundreds demonstrated outside the parliament to call for Syllouris’ resignation.
The program has attracted many foreigner investors because a Cypriot passport automatically grants its holder access to the entire 27-member European Union. Around 4,000 Cypriot passports have been issued to investors under the program, generating more than 7 billion euros ($8.25 billion).
The European Commission said it is looking into launching infringement proceedings against Cyprus.
The Cypriot government had defended the program while admitting to “mistakes” it said it rectified. New laws tightened the vetting rules and made it easier to revoke citizenship from investors found to have lied about previous criminal convictions.
But the investigative report was the coup-de-gras for the program.
An independent committee is conducting a probe into thousands of applications that were made since 2007. The investment program had gathered pace after 2013, when a financial crisis nearly brought Cyprus to bankruptcy.
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