The Cayman Islands Department of Financial Services announced the launch of a virtual asset service provider (VASP).
The ministry said in a press release on October 31 that the move strengthened the country’s “capacity to monitor and attract individuals and entities trading virtual assets as companies.”
The first phase of implementation (already during implementation) focuses on compliance and implementation of AML / CFT rules.
The new framework contains updated recommendations adopted by the special organization in 2019.
As Cointelegraph reported at the time, these recommendations included a controversial “travel rule” that required VASP to collect and share personal information about the originator and recipient of a transaction.
Existing and new market players for VASP customers will need to register with the Cayman Islands Monetary Authority to demonstrate compliance with global standards for money laundering and terrorist financing.
Following the recent joint evaluation report, the Financial Action Task Force and the Caribbean Financial Action Task Force are currently reviewing the Cayman Anti-Money Laundering / Terrorist Financing System.
The VASP framework will be submitted before the CFATF reclassification is planned for November. The results of the review of the Financial Action Task Force are expected to be published at the end of the first quarter of 2021.
The second phase of the implementation framework will include “licensing requirements and supervision”, which is expected to enter into force in June 2021.
Last month, the Cayman Islands were removed from the EU’s blacklist of tax havens and appear to be making serious efforts to improve their image in the financial world.