Is Crypto Legal In Cayman Islands?

Cryptocurrency is legal in the Cayman Islands under a comprehensive regulatory framework established by the Virtual Asset (Service Providers) Act (VASP Act), enacted in 2020. The legislation requires all entities providing virtual asset services to register with or obtain licensing from the Cayman Islands Monetary Authority (CIMA), which serves as the primary regulatory body overseeing crypto operations (1). Virtual assets are defined as digital representations of value that can be digitally traded or transferred for payment or investment purposes, excluding digital representations of fiat currencies (1).

The VASP Act implementation occurred in phases, with registration requirements taking effect on October 31, 2020, followed by enforcement provisions on January 31, 2021. Phase two, which mandates entities providing virtual asset custody services or operating virtual asset trading platforms to obtain full licensing, commenced on April 1, 2025 (1). Existing operators were required to submit license applications by June 29, 2025, though they may continue operations while applications undergo review by CIMA (2).

"A person shall not carry on, or purport to carry on, virtual asset service in or from within the Islands unless that person is a registered person; in the case of the provision of virtual asset custodial services or the operation of a virtual asset trading platform, holds a virtual asset service licence."

Virtual asset service providers must comply with strict operational requirements including maintaining adequate capital reserves, implementing robust cybersecurity measures, and adhering to anti-money laundering regulations. Natural persons are prohibited from providing virtual asset services as businesses, and all service providers must ensure their senior officers and beneficial owners meet fitness and propriety standards (1). CIMA maintains comprehensive oversight through registration systems, imposes specific requirements on custody services and trading platforms, and retains authority to direct entities toward appropriate licensing categories based on their operational characteristics (2).

Source:
https://legislation.gov.ky/cms/images/LEGISLATION/PRINCIPAL/2020/2020-0014/2020-0014_2024%20Revision.pdf
https://www.cima.ky/upimages/regulatorymeasures/RegulatoryPolicy-RegistrationorLicensingofVASPs_1716492494.pdf

Last updated: 18-10-2025 Disclaimer: This article does not provide legal advice. If you need legal advice, please contact an attorney directly.