Blockchain.com, one of the longest-established crypto businesses and a pioneer of bitcoin infrastructure, has obtained registration in the Cayman Islands under the Virtual Asset Services Providers Act.
The blockchain wallet and cryptocurrency exchange platform will expand operations into Cayman after it was registered by the Cayman Islands Monetary Authority on 6 July.
The registration allows Blockchain.com to provide custodial services, operate an exchange, and offer over-the-counter crypto brokerage services for institutional clients under CIMA’s regulatory framework.
Blockchain.com’s chief business officer Lane Kasselman told Cointelegraph on Tuesday that the Cayman Islands is an important jurisdiction for the company’s business as the local community and regulators have fostered a “robust blockchain business ecosystem”.
He said the Cayman Islands is a recognised global financial services hub and a key jurisdiction for the business as Blockchain.com’s holding company, Blockchain Group Holdings, was already registered in Cayman.
The British crypto exchange offers a widely used cryptocurrency wallet. The company says it has 37 million active users and created 83 million wallets since inception in 2011.
The venture capital-backed company is headquartered in London and as of March 2022 was valued at US$14 billion. About half of its business comes from institutional clients.
The Cayman Islands registration is part of a wider drive by the company to be regulated in the jurisdictions where it operates. The platform has money transmitter licences in various US states and is seeking registrations in Italy, France, Spain, the Netherlands and Dubai, according to the report.
Kasselman said regulatory approval was important as the company expands globally, adding that Blockchain.com would work with regulators on “thoughtful oversight” to achieve “a permanent regulatory framework for crypto”.
Nine VASPs registered so far
Cayman’s Ministry of Financial Services said in March of this year that dozens of virtual asset services providers (VASPs) have expressed interest to CIMA to continue or launch their operations in the jurisdiction as regulated entities.
But the registration of crypto businesses, originally meant to start one year ago, has taken off slowly under the legislation governing digital asset services, enacted in October 2020.
The legislation is still not fully implemented and government said in July it is contemplating changes to its regulatory regime for crypto services to improve certain practical aspects.
Key issues that are still being finalised include CIMA’s supervisory duties for trading platforms, the fee structure for new licences and renewals, the framework for selling newly-created virtual assets to the public through initial coin offerings (ICOs) and setting up a regulatory sandbox regime.
Unlike for other regulated sectors, CIMA does not publish official statistics for crypto business licences, but a search of the regulator’s website shows that nine VASP registrations have been granted so far.
They include B2C2, a global crypto liquidity provider and trading firm for institutional clients; crypto exchange BlockTrades; trading platform Floating Point Group; PryvateX, another exchange is that about to launch in September 2022; and premium digital asset trader Ryki.
In addition, Parallel Limited enables real estate transactions on island using cryptocurrency, and UpOnly is a play-to-earn gaming analytics and prediction platform.
HTC Trading, Inc., another registered VASP, is a subsidiary of Voyager Digital, the Canadian crypto lender that filed for Chapter 11 bankruptcy protection in the US in July.
HTC Trading was named in the bankruptcy filing as one of the lenders of 15,250 Bitcoins and 350 million USDC to the now-collapsed crypto fund Three Arrows Capital – a loan that has not been repaid.
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