Cayman Islands Introduces Licensing Requirements for Crypto Firms

​The Cayman Islands has revised its regulatory framework for virtual asset service providers (VASPs), mandating that all entities offering custody or trading platform services obtain a license starting April 1, 2025. This move, formalized through the Virtual Asset (Service Providers) (Amendment) Regulations, 2025, represents a shift toward a more structured oversight approach.

Under the new rules, existing VASPs operating in or from the Cayman Islands will have 90 days from the implementation date to apply for their licenses. The Cayman Islands Monetary Authority (CIMA) will oversee the process and ensure compliance.

As part of their applications, crypto custodians must disclose the types and amounts of virtual assets they intend to hold on behalf of clients, along with justifications for their safekeeping. Trading platform operators, meanwhile, must provide details about their expected revenue, physical infrastructure location, cybersecurity measures, and risk management strategies.

The Cayman Islands, a British Overseas Territory, has long been an attractive destination for financial services, including offshore forex and CFD brokers. The jurisdiction initially implemented the Virtual Asset (Service Providers) Act in 2020, which primarily focused on anti-money laundering (AML) and counter-terrorist financing (CTF) measures.

Currently, 17 VASPs are registered with CIMA, including major industry players such as Blockchain.com, Crypto.com, and B2C2. With the new licensing framework, the territory appears to be strengthening its oversight while maintaining its appeal as a hub for digital asset businesses.