Cyprus did not just load up on Greek debt because they were seeking risky loans. They loaded up back when nobody was particularly aware that there was a fundamental problem in Greece because it is easy for a country that is full of ethnic Greeks who speak Greek and are right next to Greece to be aware of opportunities to invest in Greece.

When the Greek problems became obvious, they had no easy way to divest themselves of that debt because nobody wanted it. And when the EU decided (without Cyprus having any say about it) that the bailout would involve a 50% haircut for privately held bonds, Cyprus was hosed.

It seems to me that the biggest sin that Cyprus committed was being in the wrong people (Greeks) in the wrong place (right next to Greece) at the wrong time (when Greece was diving off an economic cliff).