Crypto License in the Cayman Islands
The Cayman Islands have earned the status of a key global financial hub. The Cayman Islands Monetary Authority (CIMA) controls over 95 banks, 132 trusts, and 17,000 investment funds. Some of the largest crypto exchanges, such as Blockchain.com, Sui Foundation, OpenSea Foundation, and B2C2, have obtained a Cayman Islands crypto license and are successfully operating, providing services to millions of users. Gofaizen & Sherle specialists will provide professional support throughout the entire licensing process.
The Cayman Islands authorities are favorable towards fintech projects and see enormous potential in cryptocurrencies. Back in 2020, the VASP Law came into force, aimed at regulating the crypto sector and ensuring a safe and stable environment for all participants. An integral condition for the legal operation of crypto businesses is obtaining a crypto license in the Cayman Islands. To comply with all international AML/CFT standards, amendments were made to the VASP Act in 2024. From April 1, 2025, all crypto companies planning to provide custody, exchange, and trading of digital assets in or from the islands must apply through the CIMA online platform and obtain a license to conduct crypto business.
What Is a Cryptocurrency License in the Cayman Islands?
The main regulator, CIMA, in cooperation with Cayman Finance and the Cayman Islands Blockchain Foundation, is making every effort to maintain a balance between creating an attractive environment for new digital projects and preserving international standards of transparency in the financial activities of all market participants.
The CIMA crypto license in the Cayman Islands means the ability to provide the following types of services and operations:
- For crypto exchanges, to exchange and trade between several types of currencies, such as fiat/crypto and crypto/crypto.
- For platforms, to provide custodial services.
- For innovative projects, to issue virtual assets and conduct ICOs.
- For fintech companies, to conduct transfers in digital currencies.
Among the innovations in the legislation is the requirement for fintech companies to indicate the type of currency they plan to use for transactions, the volume of assets stored, and to prove that they have sufficient cybersecurity measures in place to protect users’ money, implement risk management, and disclose information about the location of technical equipment.
Main Benefits of Obtaining a Crypto License in the Cayman Islands
A stable and balanced financial and political environment.
The authorities have created clear and understandable conditions, predictability, and certainty for blockchain operators to work, specifying the necessary standards.
Optimal economic conditions.
For foreign businesses working with innovative products, it is advantageous to take advantage of the local tax system and implement their projects without paying corporate income tax, as well as capital gains, gifts, and inheritance taxes.
Legitimacy and security of the business environment.
The Cayman Islands are part of the Caribbean Financial Action Task Force (CFATF) and have proven compliance with all FATF standards regarding AML/CFT rules.
Global market, access to traditional banking services.
The Cayman Islands digital asset license allows businesses to engage with a multi-million-dollar audience from many countries, gain access to the financial sector, including institutions such as Cayman Crypto Bank and Butterfield Bank. Giants such as Deutsche Bank, CIBC Bank and Trust Company, and Bank of America also operate here.
High level of confidentiality.
Data on beneficial owners (BOI) – 25% or more of shares are available only to authorized persons. With the help of the CIMA online portal, you can find out the name, status, type, and date of registration of the company.
Request more information about the Cayman Islands Crypto License
The Key Cayman Islands VASP licensing requirements
VASP Part 2 Section 9 of the law sets out a fairly extensive list of requirements necessary for the successful Crypto licensing process in the Cayman Islands.
The key provisions of the regulatory act set out the following mandatory requirements:
- Implementation of AML/KYC procedures, compliance with the 2023 Anti-Money Laundering Regulations, hiring an AML manager responsible for reporting and ensuring compliance with current legislation (as agreed with the Regulator). Violation of these provisions will result in a fine of up to $20,000.
- Confirmation of the professional reputation of the beneficial owners and senior managers of the company, who will subsequently manage the assets. Compliance with fit & proper requirements includes the provision of diplomas, professional certificates, certificates of no criminal record, and declarations confirming income received.
- The presence of an official office on the islands where registers, financial reports, etc., will be stored.
- Provision of reports and necessary documentation at the request of the regulator (within 48 hours of receiving the request), as well as notification of changes in the structure of the legal entity.
- It is prohibited to invest in securities without obtaining the appropriate permission.
- There is no set amount of initial capital, but the company must demonstrate the financial potential to conduct this type of activity.
- Business plan, description of the legal entity’s structure, type of services, type of currencies, financial forecast for the next 2 years, target customers and markets.
- Implement all cybersecurity measures, programs to protect client funds from cyberattacks, theft, etc. Develop policies for storing secret keys.
CIMA typically issues licensing decisions within 2 to 3 months, but also has the right to request additional data and conduct interviews with key individuals. The application review process begins after all fees specified in the Monetary Management Act of 2024 have been paid.
Understanding the Whole Licensing Process
The VASP registration process is fairly simple, with the main difficulty lying in gathering the necessary documents and ensuring that the information provided is complete for verification by the regulator. Stages of obtaining a Cayman VASP license:
Company formation.
Step 1
The application for entry into the register is reviewed quickly within one week (or within 24 hours under the expedited procedure), but the following must be submitted:
- Basic documents about the company, contribute the authorized capital (if necessary).
- Passport details of all managers and owners, their resumes, and confirmation of relevant qualifications, as well as certificates of no criminal record.
- Business model for the next 2 years with an explanation of the organizational structure and responsibilities of each officer, cash flow diagram.
- Proof of local office rental (receipts for rent, utilities, etc.).
Application to the Regulator for a license.
Step 2
At this stage, it is necessary to carefully collect all information, as CIMA conducts a detailed analysis of each application. The entire process takes place online using the REEFS platform.
The main points that the Regulator pays attention to are:
- Approved AML/KYC procedures.
- AML manager qualifications.
- Implemented cybersecurity policies regarding user data, protection of funds from illegal access.
- A business plan describes specific activities, types of cryptocurrencies, and the target audience of the business.
- Payment of state fees.
Final decision of the Cayman Islands Monetary Authority (CIMA)
Step 3
The applicant may be subject to additional requirements for compliance with AML laws, a more detailed description of the business plan, an interview with the IT director and AML manager, and the submission of data on legal entities interacting with the applicant.
Cayman crypto business setup
State registration of a Cayman blockchain company takes about 2-5 days, but an expedited option is available within 24 hours. To further obtain VASP, it is recommended to create an exempt company (no tax obligations), but other legal forms are also available, such as LLC (limited liability company, partnerships, and foundations).
There is no minimum amount of initial capital, but a fintech company to obtain VASP should deposit the necessary amount for further business operations, as well as confirmation of its financial position.
Remote filing of documents is allowed, but access to company data is possible only to authorized persons (agents), government agencies.
The country’s legislation allows the use of a nominee director and owner.
Offshore companies must maintain an economic presence on the island, have a local office, and hire local staff.
After state registration, a fintech company has access to the banking sector, which is represented by a fairly large number of banks on the islands (about 100). Cayman Crypto Bank and Butterfield Bank specialize in crypto operations.
Cayman Islands cryptoregulation
Companies operating in the field of digital assets must comply with several regulatory standards.
Basic Cayman crypto regulations include:
- The VASP Act of 2020 (amended 2024) specifies the operating norms for operators and the provision of digital currency exchange and storage services.
- The Monetary Authority Act (as amended in 2024 S8) specifies the main amounts of government fees.
- Money Laundering Regulations 2023, which must be complied with by all registered entities in the jurisdiction.
- Beneficial Ownership Transparency Law (2025 version), describing who has access and in what cases to information on beneficiaries.
- The Companies Act (2025 version) prescribes certain procedures when registering a legal entity.
- Money Services Act (amended 2024) specifies that money transfers and provision of financial services should be carried out only with the authorization of CIMA.
Taxes and reporting
The island government has imposed zero rates on capital gains, corporation tax, gift/dividend tax, issuance, and transfer of digital assets for cryptocurrency companies. There is stamp duty, but it is negligible.
The option to obtain a 20-50-year tax exemption certificate is available.
Crypto service providers are subject to financial record-keeping requirements based on the 2023 Regulations and Statement on Internal Control Guidance:
- Companies are required to keep financial records, records of all transactions, and submit the books of account annually to CIMA for inspection. All records must be maintained at the company’s registered office.
- File suspicious transaction reports with the Regulator.
- Submit AML/KYC compliance reports every quarter.
- Conduct audits as requested by government agencies.
The VASP Act (Sec 4, 24) introduced sanctions for violators who conduct crypto-businesses without obtaining official approval from the Regulator:
- $10,000 and 1 year imprisonment, with repeated violations – $1000 for each day of unauthorized activity.
- For authorized persons (managing directors, managers) in case of violation of the rules of conducting business, a fine – $2000 and 3 months in prison.
Conclusion
The government of the British Overseas Territory requires crypto-operators to comply with all legal norms, which will subsequently minimize legal and reputational risks, application of sanctions, and strengthen the trust of potential users, business partners, and financial institutions. By building a robust crypto ecosystem, the Cayman Islands offer highly favorable, tax-neutral conditions for fintech companies, access to simple and quick registration of a VASP permit, and opened access to legal work with the global market.
FAQ about Cryptocurrency License in the Cayman Islands
Who supervises crypto activities in the Cayman Islands?
The financial market regulator is CIMA, acting under the VASP Law, supervises crypto market participants and their compliance with all regulations and rules.
Is it customary to tax cryptocurrency transactions in the Caymans?
No, there is no legislation in this jurisdiction regarding the taxation of income from cryptocurrency transactions.
Can crypto companies open bank accounts in the Cayman Islands?
Yes, provided they are authorized to conduct legal business in digital currencies.
How long does it take to get a license from CIMA?
The regulator considers the package of documents quite quickly on average from 2-4 months, but the difficulty is that it is necessary to provide comprehensive information in relation to future activities otherwise the period of analysis of the application will be extended until all deficiencies are resolved.
What are the costs of obtaining a VASP?
The total costs include the application fee, depending on the type of activity chosen, the company registration fee and the initial capital deposit, notary services, office rental, legal preparation of documents, and the annual license renewal fee.
Is it possible to register a company remotely in the Cayman Islands?
Yes, the entire process takes place online using the REEFS platform and also allows for remote company management without visiting the jurisdiction.
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