A Cayman VASP application starts with one question: whether the business provides specified virtual asset services, as a business, in or from the Cayman Islands, and if so whether those services require registration with CIMA or a licence. This overview explains how the regime defines scope, how registration differs from licensing, and what applicants prepare.
Key takeaways
- The Virtual Asset (Service Providers) Act (As Revised) regulates persons providing specified virtual asset services as a business in or from the Cayman Islands.
- In-scope activity requires registration with, or licensing by, CIMA.
- The provision of virtual asset custody services and the operation of a virtual asset trading platform require a licence rather than registration.
- The regime brings AML/CFT, governance and reporting obligations that continue after the application.
What the regime covers
The Virtual Asset (Service Providers) Act regulates the provision, as a business, of specified virtual asset services. These can include exchange between virtual assets and fiat or other virtual assets, the transfer of virtual assets, custody or administration of virtual assets, and participation in and provision of financial services related to a virtual asset issuance.
Determining whether a particular activity falls within one of these categories is the essential first step. Our guide to what counts as a virtual asset and a VASP under the Cayman regime sets out the definitions. The same classification question arises for DAOs and token projects that use a Cayman foundation company.
Registration versus licensing
The regime distinguishes between registration and licensing according to the nature of the activity. The provision of custody and the operation of a virtual asset trading platform require a licence rather than registration.
Identifying the correct pathway matters, because the application requirements and ongoing obligations differ between the two.
What applicants need to prepare
Applications generally require information on the applicant and its beneficial owners and controllers, the services to be provided, the business plan and the governance arrangements. Fit-and-proper assessments of key individuals are also required.
Critically, the applicant needs an AML/CFT framework with appointed officers; see AML obligations for relevant financial business. CIMA will expect governance, risk management and compliance arrangements proportionate to the activity.
Ongoing obligations
Registered and licensed VASPs are subject to continuing obligations, including AML/CFT compliance, governance standards, reporting to CIMA and notification of material changes. As with funds, the registration or licence is the beginning of an ongoing supervisory relationship rather than a one-off approval.
Where Bell Rock fits
Bell Rock Group Financial Services Limited is licensed by the Cayman Islands Monetary Authority as a Company Manager under the Companies Management Act (As Revised), Licence No. 633916. Through its Cayman VASP registration support, Bell Rock coordinates the scope assessment, establishes the Cayman entity and governance framework, provides AML officer appointments through named individuals who act in their personal capacity, and supports ongoing compliance. Bell Rock is not a custodian or signatory over client assets, and CIMA determines every application.
Related reading
- Setting up a Cayman crypto and blockchain fund
- Crypto fund governance priorities for independent boards
- Digital Asset Custody for Cayman Funds: What Boards and CIMA Expect
- Crypto-Asset Reporting Framework (CARF) in the Cayman Islands
Bell Rock supports virtual asset businesses through its Cayman VASP registration service.
Next step
Assessing whether the VASP regime applies?
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