The Cayman Islands' financial authorities have proposed new legislation to regulate crypto exchanges. The proposed regulations are based on FATF guidelines.
May 2, 2020 | AtoZ Markets – The financial authorities in the Cayman Islands have proposed new crypto guidelines that are meant to align the growing crypto industry with FATF requirements, enabling service providers in the country to compete at the international level.
Cayman Islands have proposed regulatory measures to regulate crypto exchanges
The legislative assembly introduced five new pieces of legislation that may be used to regulate local crypto exchanges. The bill outlines the registration process for digital currency businesses in the country. Several other countries have also implemented new crypto regulations based on the FATF guidelines.
The proposed bill brings the digital currency industry under the purview of the Cayman Islands Monetary Authority. The Virtual Asset Service Provider Bill requires any company wishing to provide virtual asset services to register with the authority and be required to renew it before 15th January every year.
According to the bill, the Monetary Authority would consider factors such as whether the crypto company has enough skilled people. It will also consider adequate cybersecurity measures, sufficient capital, and sturdy accounting systems. A virtual asset service provider must have a registered office in the Cayman Islands before getting a license to operate.
The proposed bill establishes a regulatory sandbox for VASPs
To obtain the license under the proposed bill, a crypto company must prove that its service improves the financial services in the Islands and complies with global standards. Nevertheless, companies in the sandbox will have an exemption from requirements applying to other VASPs.
Read: Hawaii Introduces Regulatory Sandbox for Digital Currency Issuers
The exemption would allow them to develop their services with much more freedom. The proposed bill also gives the Authority oversight powers over the crypto industry.
According to the bill, the authority can revoke the license, take to court any company that fails to comply with set guidelines, and order a VASP to substitute any senior officer. The Finance Minister of the Cayman Islands, Tara Rivers, said that these measures under the proposed bill would ensure that the islands fortify its position as a global cryptocurrency hub.
What do you think of the new cryptocurrency regulations proposed in the Cayman Islands? Share your thoughts in the comments below.