Cayman Islands Implements Stricter Crypto Licensing Rules

The Cayman Islands is set to implement new regulations requiring virtual asset service providers (VASPs) offering custody and trading services to obtain official licensing from the Cayman Islands Monetary Authority (CIMA).

These rules, effective April 1, 2025, aim to bring the territory in line with global standards designed to enhance market integrity and investor protection.

The upcoming regulations, detailed in the Virtual Asset Service Providers Amendment Regulations 2025, will apply to all VASPs offering custody or trading services, including both new and existing companies. A 90-day compliance window will be provided, with firms required to meet the licensing criteria by July 1, 2025. As part of this process, custody providers will need to disclose the types and values of assets they hold, while trading platforms must report projected revenue and the location of their physical hardware. This transparency is meant to improve oversight and regulatory accountability.

To further tighten security, companies must also submit plans for cybersecurity, risk management, and procedures to prevent asset loss or theft. These measures are in line with global efforts to address vulnerabilities within the digital asset sector.

This regulatory shift builds on the existing Virtual Asset (Service Providers) Act 2020 and recent updates following the Financial Action Task Force’s recommendations. With stricter compliance requirements, the new framework is expected to shape the Cayman Islands’ crypto market by attracting well-established firms while potentially eliminating operators unable to meet these high standards. Smaller companies may face challenges in adapting to the new regulations, while larger firms are likely to have the resources needed to comply more easily, potentially gaining a competitive edge.

Author

Alexander Stefanov

Reporter at CoinsPress

Alex is an experienced finance journalist and a cryptocurrency and blockchain enthusiast. With over five years of experience covering the industry, he deeply understands the complex and constantly evolving world of digital assets. His insightful and thought-provoking articles provide readers with a clear picture of the latest developments and trends in the market. His passionate approach allows him to break down complex ideas into accessible and insightful content. Follow up on his content to be up to date with the most important trends and topics - stay ahead of the curve with CoinsPress.