Cayman Islands Now Requires Licensing for Cryptocurrency Custody and Trading Companies
The new law will come into force on April 1, 2025.
Helen Brown | Edited by Nikhilesh De , 10 Mar 2025 14:56 UTC
What you need to know:
- The Cayman Islands will require companies that store and trade cryptocurrency to obtain a license under new rules that come into effect on April 1, 2025.
- Organisations already operating in the country will have until 29 June 2025 to submit their applications, providing details of their asset security measures and the specifics of their operations.
- Major crypto companies such as Coinbase, Binance and Bitwise have already received licenses in the Cayman Islands, and some, such as the Sui Foundation, have opened offices in the region.
The Cayman Islands, an autonomous British Overseas Territory in the Caribbean that has attracted many cryptocurrency companies in recent years due to its favorable regulatory framework, now requires companies providing custody and trading services to obtain a license.
According to the country's updated Virtual Assets (Service Providers) (Amendment) Regulations, the new law will come into effect on April 1, 2025, and companies already operating in the country will have to apply by June 29, 2025.
During the application process, custodians are required to disclose the types and volumes of cryptocurrencies they plan to hold for their clients, as well as justify the need to ensure the secure storage of these cryptocurrencies, etc.
On the other hand, trading platforms will have to provide information about the expected revenue and physical location of their equipment, as well as disclose how they will ensure the security of these assets.
The Cayman Islands' initial set of rules for virtual asset service providers (VASPs) was introduced in 2021. At the time, the framework was designed to “strengthen” the government's ability to attract new participants.
Since then, several small and large crypto firms have received licenses in the country, including Coinbase, Binance, and Bitwise. Others have even opened their headquarters in the region, such as the Sui Foundation.
