Virtual Asset (Service Providers) (Amendment) Bill, 2025

Summary

This is a draft bill (not yet enacted) that would amend the Virtual Asset (Service Providers) Act (2024 Revision) to change the statutory definition of "issuance of virtual assets" (also called "virtual asset issuance"). The amendment narrows what counts as a regulated virtual asset issuance by excluding certain tokenised interests, subject to a statement of guidance or rule that the Cayman Islands Monetary Authority (CIMA) may issue.

• Excluded: tokenised equity interest: An "equity interest" (as defined under the Mutual Funds Act (2025 Revision) and the Securities Investment Business Act (2020 Revision)) that has been tokenised.
• Excluded: tokenised investment interest: An "investment interest" (as defined under the Private Funds Act (2025 Revision)) that has been tokenised.

The practical effect is that tokenised equity interests in mutual funds/securities investment business, or tokenised investment interests in private funds, would fall outside the scope of "virtual asset issuance" under the VASP Act. This means issuers of such tokenised interests would not need a VASP issuance registration/licence for that activity, provided CIMA's forthcoming guidance or rule confirms the exclusion applies. The bill also clarifies that this exclusion applies retroactively to any such tokenisation that occurred before the amending Act comes into force.

The bill is currently at the draft/introduced stage (published with the Legislation Gazette dated 28 May 2025) and has not yet been passed or brought into force. It will take effect on a date to be appointed by the Cabinet via Order, once passed by Parliament. No immediate compliance action is required while it remains a bill, but virtual asset service providers, mutual funds, private funds, and securities investment business entities involved in tokenisation of equity or investment interests should monitor its progress and any related CIMA statement of guidance or rule.

Key obligations

• Once in force, issuers must rely on a forthcoming CIMA statement of guidance or rule to confirm that tokenised equity/investment interests are excluded from the definition of virtual asset issuance before treating them as outside VASP Act scope.
• Entities should monitor for the Cabinet's Order bringing the amending Act into force, as the exclusion (including its retroactive effect on prior tokenisations) only applies from that commencement date.

Applies to

virtual asset service providers, mutual funds, private funds, securities investment business licensees, issuers of tokenised equity or investment interests

Deadlines

• date to be appointed by Order made by the Cabinet: Commencement of the Virtual Asset (Service Providers) (Amendment) Act, 2025 (once passed) is not immediate but occurs on a date the Cabinet will separately appoint by Order.

Related documents

• This document amends Virtual Asset (Service Providers) Act (2024 Revision)