Virtual asset services enforcement takes effect

The Ministry of Financial Services advised the public that the enforcement provisions of the Virtual Asset Service Providers (VASP) Act have come into effect on Sunday, 31 Jan.

The corresponding commencement order was published on 28 Oct. 2020.

The provisions allow the Cayman Islands Monetary Authority (CIMA) to take action where a person breaches certain provisions of the VASP Act.

The financial services regulator reminded service providers that registration and notification applications, as well as the so-called Inherent Risk Form, had to be submitted by 31 Jan.

To comply with the VASP Act all new market entrants, as well as existing service providers and other authorised entities in the virtual asset space, must complete the requisite forms via CIMA’s online platform.

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Entities that fail to register or notify the authority by the 31 Jan. deadline will be in breach of the act and subject to enforcement measures, CIMA said in a public notice.

Cayman’s regulatory framework for service providers in the virtual asset space came into force on 31 Oct. in the first of two phases.

Under phase one, which focusses on anti-money laundering compliance, supervision and enforcement, virtual asset services providers will need to register with the Cayman Islands Monetary Authority to demonstrate compliance with international AML standards.

Phase two, which includes licensing requirements and prudential supervision, is expected to come into force in June 2021.

For more information, email CIMA at [email protected].

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