CAYMAN ISLANDS MOVES FORWARD WITH VIRTUAL ASSET SERVICE PROVIDERS REGULATION
Grand Cayman, Cayman Islands
The Cayman Islands has made a significant step forward in its efforts to regulate the virtual asset industry. As of October 31, 2020, all new market entrants and pre-existing service providers seeking to provide virtual asset services must register with the Cayman Islands Monetary Authority (CIMA).
What is Virtual Asset Service Providers (VASPs) Regulation?
The VASPs regulation is a major milestone in the country’s efforts to bring cryptocurrency and other digital assets under regulatory oversight. The two-phase regulatory approach is designed to ensure a smooth transition into compliance with global standards.
Phase One: Notification and Registration Requirements
- Commenced on October 31, 2020
- Requires notification and registration of all new market entrants and pre-existing service providers
- Includes entities engaged in virtual asset custodial services and those operating electronic platforms for trading virtual currencies
Phase Two: Licensing Requirements
- Scheduled to begin in June 2021
- Introduces licensing requirements for specific persons and entities
- Will include the travel rule, which requires VASPs to report certain transactions above a certain threshold
Benefits of Regulation
The Cayman Islands’ VASP regulation is designed to protect investors, prevent money laundering and terrorist financing, and promote the growth of the industry.
Key Dates
- October 31, 2020: Phase one begins
- January 31, 2021: Deadline for VASPs who have not registered or notified CIMA to do so. Failure to comply may result in penalties and other enforcement measures.
- June 2021: Phase two begins
Further Resources
For more information on the Cayman Islands’ VASP regulation, including deadlines and fees, please visit the CIMA website.
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