Virtual Assets
Digital representations of value that can be digitally traded or transferred and used for payment or investment purposes.
Virtual_Asset_(Service_Providers)Act(2024_Revision).pdf
2026-04-27
The Cayman Islands has established a comprehensive regime for virtual-assets under the virtual-asset-service-providers-act-2024.
What constitutes a Virtual Asset? A digital representation of value that is digitally tradable or transferable. It excludes digital representations of fiat currencies (like central bank digital currencies) and "virtual service tokens" (non-transferable tokens used only for application access).
Regulation of the Sector: The sector is supervised by cima. Key focus areas include:
- AML/CFT: Preventing the use of virtual assets for money laundering or terrorist financing.
- Licensing vs. Registration: Entities providing standard services (like exchange or transfer) must register, while those offering custody or operating trading platforms require a full licence, which mandates extensive disclosures on cybersecurity, market integrity, and hardware location (source: virtual-asset-service-providers-amendment-regulations-2025).
- Governance: All VASPs must maintain at least three directors, including at least one independent director (source: virtual-asset-service-providers-amendment-act-2024).
- Custody Standards: Ensuring that virtual asset custodians have "bankruptcy remote" accounts to protect client assets from the custodian's creditors.
- Market Integrity: Trading platforms must have mechanisms to prevent price manipulation and ensure fair price discovery.
- Enforcement: CIMA possesses strong enforcement tools, including the ability to obtain warrants to search physical premises and electronic devices/platforms for evidence of regulatory or AML breaches (source: virtual-asset-service-providers-amendment-act-2024).
- Fees: The regulatory framework imposes a highly tiered fee structure based on revenue and activity type, with trading platforms facing annual renewal fees up to $200,000 (source: virtual-asset-service-providers-amendment-regulations-2025).
Intersection with Securities: CIMA assesses whether a virtual asset also falls under the definition of a security under the securities-investment-business-act-2020. If so, additional licensing or registration requirements may apply.