The Ministry of Financial Services of the Cayman Islands Government reportedly disclosed details, regarding the commencement of a regulatory framework, dedicated to virtual asset service providers. 

Specifically, the ministry reportedly stated that the initiative was carried out with a goal to reinforce the nation’s  “ability to regulate and attract persons and entities that deal with virtual assets as a business.”

The first part of the project, which is being conducted at the moment, reportedly works primarily with compliance with and enforcement of Anti-Money Laundering (AML) and Countering the Financing of Terrorism laws. 

The new framework reportedly also took into account the suggestions from the Financial Action Task Force adopted last year, which mentioned the controversial “travel rule”, making it mandatory for VASPs to gather and share personal information of the originator and beneficiary of transactions.

The current VASPs as well as newcomers to the market will be required to finalize the registration with the Cayman Islands Monetary Authority, so as to present their compliance with international AML/CFT standards.

Cayman’s AML/CFT regime is reportedly being reviewed by the FATF and the Caribbean Financial Action Task Force at the moment, after a recent Mutual Evaluation Report published. 

The VASP framework will reportedly be put up for consideration before the CFATF re-rating, with a deadline set in November, and insights of the FATF review are bound to be available towards the end of the first quarter next year.