Overview of Crypto regulations

How are crypto exchanges regulated in the Cayman Islands?

They may be regulated as "virtual asset trading platforms" under the Virtual Asset (Service Providers) Law, 2020. This requires a licence from the Cayman Islands Monetary Authority (CIMA).

According to CIMA (VASP Law)
last revised 25 May 2020

(2) For the purposes of this Law, “virtual asset trading platform” means a centralized or decentralized digital platform —

(a) which facilitates the exchange of virtual assets for fiat currency or other virtual assets on behalf of third parties for a fee, commission, spread or other benefit; and

(b) which —
(i) holds custody of or controls virtual assets on behalf of its clients to facilitate an exchange; or (ii) purchases virtual assets from a seller when transactions or bids and offers are matched in order to sell them to a buyer,

and includes its owner or operator, but does not include a platform that only provides a forum where sellers and buyers may post bids and offers and a forum where the parties trade in a separate platform or in a peer-to-peer manner.

Registration or licence required
4. (1) Subject to subsections (2) and (3), a person shall not carry on, or purport to carry on, virtual asset service in or from within the Islands unless that person —
(b) 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;