This document outlines the latest amendments to the Virtual Asset (Service Providers) Act (2024 Revision) under the Virtual Asset (Service Providers) (Amendment) Regulations, 2025 (SL 19 of 2025), published on February 27, 2025. The key changes include:
- Enactment & Scope
- The amendments will come into effect immediately after the Virtual Asset (Service Providers) (Amendment) Act, 2024 is enforced.
- The changes primarily revise the Virtual Asset (Service Providers) Regulations, 2020.
- New Regulation 4A: License Application
- A formal process for applying for a VASP license is introduced.
- Applicants must submit a detailed business proposal, financial projections, management structure, customer base, and compliance measures.
- Regulation 5: Fees Update
- The fee structure for VASP registration and licensing is updated.
- Different fee categories apply based on business revenue and services offered (e.g., virtual asset custody, trading platforms).
- Schedule 1A: License Application Requirements
- Applications must include financial records, organizational structure, compliance measures, and business strategies.
- Separate requirements exist for custodial services and trading platforms, covering cybersecurity, risk management, AML/KYC policies, and insurance.
- Schedule 2: Revised Fee Structure
- Registration Fees: Fees for VASP registration depend on the revenue level and whether the service includes virtual asset issuance.
- License Fees: Different fees apply to custodial services and trading platforms, with reduced fees for local companies under the Local Companies (Control) Act (2025 Revision).
- Renewal Fees: Based on annual revenue, with tiered pricing for custody services and trading platforms.
Conclusion:
The 2025 amendments introduce stricter licensing requirements, updated fees, and enhanced regulatory oversight for VASP operations in the Cayman Islands. The goal is to improve compliance, transparency, and investor protection in the virtual asset sector.
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