Virtual Asset Service Provider License in Cayman Islands

Exchanging between virtual assets and fiat currencies, or between different forms of convertible virtual assets

Transferring virtual assets on behalf of another person

Participating in and providing financial services related to an issuer’s public offer or sale of a virtual asset (e.g., initial token offerings)

Providing safekeeping or administration of virtual assets or instruments enabling control over them (requires a Full License)

Operating a platform where virtual assets can be exchanged or traded (requires a Full License)

Basic exchange, transfer, and token sale providers must obtain a VASP Registration. Custody providers and trading platform operators must hold a Virtual Asset Service License (VASL)

A minimum of three directors is required at all times, including at least one independent director who has no vested or affiliated interest in the business

Total adherence to Cayman Anti-Money Laundering Regulations. VASPs must officially appoint natural persons to the dedicated roles of Anti-Money Laundering Compliance Officer (AMLCO), Money Laundering Reporting Officer (MLRO), and a Deputy MLRO. All appointments require prior CIMA approval

Full compliance with the Financial Action Task Force (FATF) Recommendation 16. VASPs must securely obtain, hold, and transmit vital originator and beneficiary information during virtual asset transfers

Prior written approval from CIMA is mandatory before issuing, transferring, or disposing of equity interests that represent 10% or more of the VASP’s total ownership

Appoint at least three directors

At least one director must be independent

All directors, senior officers, and beneficial owners must pass CIMA’s fit-and-proper assessments

CIMA must approve senior officer appointments before they take office

Vetting of the professional track record, integrity, and competence of all shareholders, proposed directors, and senior management officers

Detailed scrutiny of the underlying IT and blockchain infrastructure, system scalability, and business continuity protocols

Proof that the business model, target market, or operational practices do not contradict public interest or pose systemic risk to the jurisdiction’s financial markets

The VASP framework applies to any entity incorporated in the Cayman Islands that provides virtual asset services "in or from within" the jurisdiction.

While operations are legally based and anchored out of the Cayman Islands, the VASP can service a global clientele, subject to complying with cross-border marketing regulations and localized restrictions within the target consumer’s jurisdiction

As part of the Phase 2 requirements, trading platform operators must explicitly disclose the physical location of their supporting server hardware to CIMA

The Cayman Islands imposes no corporate tax, income tax, capital gains tax, or withholding tax on VASPs or their digital asset transactions

Cayman VASPs can apply to the government for a Tax Concession Certificate, which provides a legally binding guarantee that the entity will remain exempt from any newly introduced local corporate or income taxes for a guaranteed period (typically 20 to 30 years)

Pure virtual asset service provisioning (such as token sales or operating a decentralized protocol) does not explicitly fall under traditional "relevant activities" of Cayman Economic Substance laws. However, if the VASP vehicle simultaneously acts as a holding company or conducts intellectual property / financing operations, it must fulfill strict localized physical presence and expenditure tests

All registered and licensed VASPs must maintain detailed, up-to-date annual accounts that are open for regular CIMA inspections

Under updated provisions, full licensees (custodians and platforms) are subject to mandatory annual external financial audits. CIMA reserves the broad discretion to demand audited accounts from any registered VASP based on business complexity or reporting concerns

Licensees providing custody must maintain a clear register of positions for each client. Client virtual assets must be kept in segregated wallets that are visually and structurally isolated from the VASP's own operational corporate assets