Crypto Regulations in Cayman Island 2025

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The Cayman Islands is a popular choice for crypto funds due to its well-structured jurisdiction, which creates a defined regulatory framework for digital assets. Major cryptocurrency exchanges, such as Coinbase and Binance, have already secured a license in the Cayman Islands to leverage the jurisdiction’s credibility. 

Crypto Regulations in the Cayman Islands 

July 1, 2025 – Last Date to Secure a License 

Existing registered firms are required to secure a license before the deadline and comply with strict regulations of anti-money laundering (AML), counter-terrorism in finance (CFT), and maintain transparent transactions. 

June 29, 2025 – Deadline for VASP license Application

Existing virtual asset service providers must submit their license application by June 29. 

The process requires detailed disclosures about asset security and operational specifics. 

April 1, 2025 – Virtual Assets Services Providers (VASPs) Act 

The Cayman Islands Monetary Authority (CIMA) is the supervising body ensuring the VASPs’ licenses. 

A VASP will now also be required to have at least three directors and will be required to submit a non-refundable fee. 

Timeline of major crypto regulations in the Cayman Islands

Date Regulations / LawDetails July 31, 2024VASP Act (2024 Revision)Mandatory segregation of client assets, enhanced disclosure, and non-refundable feesFebruary 13, 2024Virtual asset (service providers) amendment billRefining definitions of ‘operators’ and ‘convertible virtual assets’May 16, 2023VASP Act 2023Inclusion of corporate structures, clarified responsibilities, and outlined offensesDecember 31, 2021VASP Act (2022 revision)Amendment of the regulatory landscape and refined definitionsJanuary 11, 2021VASP (Saving and transitional regs)Introduced transitional provisions October 28, 2020VASP regulationAdditional specifications and operational details May 25, 2020VASP LawFoundational framework for regulating VASPs

What Is the Cayman Islands Government Saying About Crypto?

The Cayman Monetary Authority (CIMA) is the primary body regulating cryptocurrency and other virtual assets. The agency’s current aim is to regulate a mandatory Virtual Asset Service Provider (VASP) license. Crypto regulators are currently focusing on: 

Anti-money laundering (AML) and counter-financing terrorism (CFT) compliance

Preventing crypto frauds and cybercrimes

Overseeing VASP licensing and registration

Offering a safe environment for operating crypto-related activities, including trading, custody, and initial coin offerings (ICOs).

Crypto License in the Cayman Islands 2025

Under the new law, entities providing any crypto-related services must obtain a VASP license after registering with the Cayman Monetary Authority (CIMA). June 29, 2025, is the deadline for submitting the application for the license. 

Under the 2021 enforcement, CIMA has the authority to impose penalties if any noncompliance with the VASP license is caught. 

Virtual asset custodians will have to follow the obligations of:

Fiat currency custody

Record keeping

Custodial arrangements with clients 

IT practices

Client segregation requirements 

VASP Obligations: 

Restriction on engaging in detrimental trading for its own benefit

Restriction from trading icrypto n a deceptive manner 

VASPs must oblige due diligence on virtual assets and their issuers

Crypto Tax in the Cayman Islands

Is crypto taxable in the Cayman Islands? No, Cayman has a tax-free regime for crypto and has been known as a tax haven for crypto investors and businesses. 

It does not impose corporate tax on businesses, and no income tax or capital gains tax on individuals. Instead of taxation, the region earns revenue through tourism, work permits, and GST. 

Crypto Adoption in the Cayman Islands 2025

While there is no specific figure available for the crypto adoption rate, a growth has been experienced after the VASP license implementation. The Cayman jurisdiction is actively working to establish itself as a leader in the crypto and blockchain space. 

Crypto Holdings: The Cayman Islands government’s crypto holdings have not been publicly disclosed yet. It is rather focusing on embracing innovation to create a robust crypto regulatory framework. 

Conclusion

The Cayman Islands is a crypto-friendly territory that is attracting global investment funds and businesses. The Cayman government aims to establish a safe and secure landscape for digital assets with a modern cryptocurrency regulatory framework. While there is no data revealing the exact figure of the government’s crypto holdings, its strong regulatory framework suggests that it holds some assets.