Major Change: Cayman Islands Tightens Cryptocurrency Regulation
Starting from April 1, 2025, all companies providing custodial and cryptocurrency trading services in the Cayman Islands #Cayman will have to register for operating licenses under the new regulations.
According to information from the amended law on Virtual Asset Service Providers (VASP), companies operating here must complete their application by June 29, 2025.
Conditions for Licensing
Companies providing custodial services will need:
Disclose the type of assets and the amount of cryptocurrency they hold for customers.
Present security measures to protect this asset.
Meanwhile, cryptocurrency trading platforms must:
Report expected revenue and operational hardware location.
Demonstrate how to protect users' assets from risks.
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Why Are the Cayman Islands Tightening Crypto Regulation?
The Cayman Islands has long become a haven for crypto companies due to its open policies. Since 2021, the government has issued the first set of rules on #VASP to attract blockchain businesses.
As a result, many large companies such as Coinbase, Binance, and Bitwise have registered for operating licenses here. Some organizations have even chosen the Cayman Islands as their headquarters, notably the Sui Foundation.
Impact on the Cryptocurrency Industry
Mandatory licensing allows the Cayman Islands to:
✅ Enhance transparent management of crypto companies.
✅ Ensure asset safety for users.
✅ Limit illegal activities such as money laundering or financial fraud.
However, this move could also cause some small companies or startups to shift to other regions with more flexible policies.
Will Other Countries Follow Suit?
In the context of countries tightening regulations on crypto, the decision of the Cayman Islands could be a pioneering step. Financial centers such as Singapore, UAE, and Switzerland are also strengthening similar licensing requirements.
👉 What do you think about this new regulation? Will it help the crypto industry develop more sustainably or will it stifle innovation? 🚀