Virtual Asset (Service Providers) Act (2024 Revision)

Status per the Cayman Islands legislation register (legislation.gov.ky) (as at 2026-07-09)

Summary

This is the Virtual Asset (Service Providers) Act (2024 Revision), the primary Cayman Islands statute regulating persons who provide virtual asset (crypto-asset) services 'in or from within' the Islands. It defines what counts as a 'virtual asset', 'virtual asset service' (exchange, transfer, custody, and services related to virtual asset issuances) and 'virtual asset service provider' (VASP), and sets out the licensing/registration framework administered by the Cayman Islands Monetary Authority (CIMA).

The Act applies to legal entities (companies, partnerships, exempted limited partnerships, foreign companies, LLCs and LLPs) that carry on virtual asset services as a business from the Cayman Islands. Natural persons are prohibited from carrying on such business at all.

Licensing pathways

Registration: Required with CIMA for simple issuance-related activity.
Full virtual asset service licence: Mandatory for custody services and trading platform operators.
Sandbox licence: Available for innovative or limited-scale testing.
Waiver as existing licensee: For providers already licensed under another Cayman regulatory law, a waiver from CIMA is required instead.

The Act also empowers CIMA to direct persons to apply for a licence under this Act or another regulatory law, to approve or refuse issuance requests before a virtual asset issuance, and to supervise, investigate, discipline (including cease-and-desist directions and licence revocation), and wind up regulated entities.

Ongoing regulatory requirements

General conduct requirements: Apply to all VASPs.
Additional requirements: Specific rules apply to custody services and trading platforms.
Share issuance or transfer: Restricted for licensees without CIMA's prior approval.
Audit obligations: Audit and auditor-duty obligations apply.
Fitness and propriety standards: Apply to licensees and their senior officers.

Carrying on virtual asset service without the required registration, licence or waiver is a criminal offence, and corporate/partnership officers can be held personally liable for offences committed by the entity.

Key obligations

A person must not carry on, or purport to carry on, virtual asset service in or from within the Cayman Islands unless registered, licensed (including sandbox licence), or granted a waiver as an existing licensee (s.4(1)).
Natural persons are prohibited from carrying on virtual asset service as a business or in the course of business in or from the Islands (s.4(2)).
Providers of virtual asset custody services or operators of virtual asset trading platforms must hold a virtual asset service licence, not merely be a registered person (s.4(1)(b)).
An application for registration or a licence must be accompanied by the prescribed non-refundable assessment fee, and upon approval the applicant must pay the specified application fee (s.5).
Existing licensees under other regulatory laws must give notice to CIMA and, where required, apply for a waiver before continuing to provide virtual asset services (s.15, s.16).
Persons directed by the Authority to apply for a licence under this Act or under another regulatory law must comply with that direction (ss.13-14).
Virtual asset service licensees, registered persons and sandbox licensees must comply with general requirements for virtual asset service providers, and additional requirements specific to custody services and trading platforms (ss.9-11).
A virtual asset issuer must submit an issuance request to the Authority prior to a virtual asset issuance (s.12).
Shares of a licensee must not be issued or transferred without the prior approval of the Authority (s.28).
Licensees are subject to audit of accounts requirements and their auditors have statutory duties to report to the Authority (ss.31-32).
Licensees and registered persons must meet fitness and propriety standards (s.38).
Carrying on virtual asset service business without the required licence, registration or waiver is a criminal offence (s.35).

Applies to

virtual asset service providers, registered persons, virtual asset service licensees, sandbox licensees, virtual asset custodians, virtual asset trading platform operators, existing licensees under other regulatory laws

Virtual Asset (Service Providers) Act (2024 Revision)

Summary

Licensing pathways

Ongoing regulatory requirements

Key obligations

Applies to

Related documents

Topics

Version history

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