Cayman Islands to Tighten Cryptocurrency Service Requirements
Date: 2025-03-11 Author: Henry Casey Categories: IN WORLD
All providers of such services are now required to apply for a license within 90 days from April 1, 2025. The changes apply to both new and existing crypto companies in the country.
Under the new rules, cryptocurrency service operators that provide custody of virtual assets must provide detailed information on the types and volumes of assets they intend to hold for their clients. They must also describe the methods used to ensure the security of digital assets. In the case of trading platform operators, they must specify the expected revenue, as well as the location of the physical equipment that will be used to process transactions. Platforms must provide information on measures to ensure cybersecurity, risk management and asset protection, as well as internal controls of business processes.
The Cayman Islands regulator, the Cayman Islands Monetary Authority (CIMA), which already oversees 17 crypto companies in the islands, will also require all virtual asset operators to comply with these updated requirements. Companies such as Blockchain.com, Crypto.com, and B2C2, which are under CIMA’s supervision, will have to go through this licensing process.
It is worth noting that in 2023, crypto lender Nexo sued CIMA, claiming that the regulator refused to register it as a virtual asset service provider. This case became a clear example of how the new requirements can affect the activities of crypto companies operating in the Cayman Islands.
Thus, the changes to the Cayman Islands’ virtual asset regulations are aimed at increasing oversight of the crypto sector, which should help improve the security of virtual asset transactions and minimize financial risks for clients.
