The Cayman Islands Ministry of Financial Services has announced the development of a regulatory framework for virtual asset service providers (VASPs).
In a press release on 31 October, the Ministry said the regulation will help „to attract individuals and organisations doing business in the field of virtual assets“.
The first phase of implementation focuses on ensuring compliance with the AML/CFT regulations as well as the Financial Action Task Force (FATF) recommendations. FATF recommendations include the controversial Travel Rule, which requires VASP to collect and transfer personal data about the sender and the recipient of transactions.
The Cayman Islands financial regulator Bitcoin Blueprint will register the VASP to verify compliance with AML/CFT standards.
The second stage of implementation is scheduled for June 2021. This will include the adoption of licensing requirements and the mandatory regulation of the VASP.
Last month, the Cayman Islands was removed from the EU’s tax havens blacklist and began taking steps to strengthen financial regulation.