Public Advisory - Virtual Assets and Virtual Asset Service Providers (2019-11-22)

Summary

This is a public advisory issued by the Cayman Islands Monetary Authority (CIMA) in November 2019 reminding the public and industry that providing virtual asset services is treated as "relevant financial business" under Schedule 6 of the Proceeds of Crime Law (2019 Revision). As a result, virtual asset service providers (VASPs) are subject to the Anti-Money Laundering Regulations (2018 Revision) (AMLRs), including customer due diligence and other preventative measures. The advisory does not create new rules but restates existing obligations.

• CIMA's role: CIMA is responsible for monitoring AML compliance by financial businesses, including VASPs.
• Enforcement: Failure to comply with the AMLRs can result in administrative fines under the Monetary Authority (Administrative Fines) Regulations (2019 Revision).
• Investor guidance: Investors are urged to research virtual asset investments and the entities behind them carefully, and to seek legal advice when in doubt.
• Reporting fraud: Suspected fraud involving virtual assets should be reported to the Financial Crime Investigation Unit of the Royal Cayman Islands Police Service.

Key obligations

• Virtual asset service providers (VASPs) must comply with the Anti-Money Laundering Regulations (2018 Revision), including conducting customer due diligence and other preventative measures, as providing virtual asset services is treated as relevant financial business.
• Persons engaged in relevant financial business, including VASPs, must adhere to AMLR requirements or risk an administrative fine under the Monetary Authority (Administrative Fines) Regulations (2019 Revision).

Applies to

virtual asset service providers (VASPs), persons engaged in relevant financial business