The Cayman Islands, long regarded as a haven for cryptocurrency businesses due to its favorable regulatory environment, is set to implement stricter oversight on firms providing crypto custody and trading services.
Starting 1 April 2025, companies operating in this sector will be required to obtain licenses under the updated Virtual Asset (Service Providers) (Amendment) Regulations.
Existing virtual asset service providers (VASPs) have 90 days to apply in this British Overseas Territory.
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Firms Operating In Cayman Islands Must Submit Licensing Applications By June 2025
Under the new law, firms currently operating in the Cayman Islands must submit their licensing applications by June 29, 2025. Furthermore, the application process is comprehensive, requiring detailed disclosures about asset security measures and operational specifics.
Going forward, companies offering crypto custody services will have to outline the types and quantities of cryptocurrencies they plan to hold for clients. Additionally, they are required to provide justifications for their methods of secure storage.
Also, exchanges and trading platforms will have to disclose their expected revenue streams, the physical location of their operational hardware, and strategies for safeguarding client assets.
Apparently, these measures aim to create a robust framework for VASPs. In the future, businesses operating in or considering entry into the Cayman Islands market will have to prepare according to the new laws.
A History of Crypto-Friendly Policies
The Cayman Islands has been a magnet for cryptocurrency firms since it introduced its initial VASP regulations in 2021. These rules were designed to attract businesses by providing clarity and structure while maintaining a relatively lenient approach compared to other jurisdictions.
Over the years, this strategy has proven successful, with major players such as Coinbase, Binance, and Bitwise obtaining licenses in the territory. Additionally, some firms, like the Sui Foundation, have established their headquarters there.
The introduction of stricter licensing requirements reflects the government’s evolving stance on crypto regulation.
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Key Takeaways
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The Cayman Islands’ move toward mandatory licensing for crypto custody and trading firms marks a pivotal moment for one of the world’s most prominent crypto hubs.
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This move signals a significant shift in the territory’s approach to crypto regulation, aiming to enhance transparency and security in the crypto space.
The post Cayman Islands Tightens Crypto Regulations: Licensing Now Mandatory For Custody And Trading Firms appeared first on 99Bitcoins.
