The Cayman Islands, an autonomous British Overseas Territory in the Caribbean that has attracted many crypto firms over the past several years thanks to its friendly regulatory structure, now requires companies that provide custody and trading services to obtain a license.
According to the country’s updated Virtual Asset (Service Providers) (Amendment) Regulations, the new law will go into effect on April 1, 2025, and firms already operating in the country will be required to submit their application before June 29, 2025.
The application process asks custodians to disclose the types and amount of crypto they plan to hold on behalf of their clients as well as provide justification for ensuring the secure storage of these cryptocurrencies, among other things.
Trading platforms, on the other hand, will have to give insight into their expected revenue and the physical location of their operational hardware as well as disclose how they will ensure the safety of those assets.
The Cayman Islands’ initial set of rules for virtual asset service providers (VASPs) came into effect in 2021. The framework then was designed to “strengthen” the government’s ability to draw new entities.
Since then, several small and large crypto firms have obtained licenses in the country, including Coinbase, Binance, Bitwise. Others have even opened headquarters in the area, such as Sui Foundation.