Last updated on March 11th, 2025 at 09:01 am
The Cayman Islands has rolled out new licensing requirements for cryptocurrency custody and trading platforms, signalling a major regulatory shift in the British Overseas Territory.
According to the Finance Magnate report, Effective April 1, the updated Virtual Asset (Service Providers) (Amendment) Regulations, 2025, mandate that all digital asset custodians and trading platforms secure a license from the Cayman Islands Monetary Authority (CIMA) to continue operations.
Under the new rules, existing service providers have a 90-day window to submit their applications detailing their cybersecurity measures, risk management frameworks, and asset protection strategies. Crypto custodians must disclose the types and amounts of virtual assets they intend to hold and justify their custody arrangements. Meanwhile, trading platform operators must provide revenue projections and specify the location of their supporting hardware infrastructure.
This move departs from the Cayman Islands’ traditionally open regulatory stance toward crypto firms. While the territory first introduced its Virtual Asset Service Providers (VASP) Act in 2020, the law primarily aimed to combat money laundering and terrorist financing rather than impose direct industry oversight. With the latest amendment, the regulatory scope has now expanded to cover the operations of crypto service providers.
Currently, 17 companies in the Cayman Islands are registered as VASPs, including prominent industry players such as Crypto.com and Blockchain.com. These firms and others operating in the territory must now adhere to the updated licensing framework or risk non-compliance with CIMA’s oversight.
This regulatory shift comes as Crypto.com expands its footprint in the United States by launching a new institutional trading platform. Announced on January 21, the platform was designed to cater to institutional investors, offering advanced trading tools to enhance their experience. This move reinforced the Singapore-based exchange’s presence in the U.S. and complemented the existing Crypto.com App, primarily serving retail traders in the region.
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