The Cayman Islands’ VASP Law provides framework for virtual asset businesses
The Cayman Islands’ VASP (Virtual Asset Service Provider) Law, 2020 is a new law introduced that will provide a comprehensive framework for regulating virtual asset businesses. It has been approved and published by the Cayman Legislature, but it has not yet “gone live.” It is expected to “go live” in late 2020 (latest early 2021) once the detailed regulations underpinning the VASP law are published. These regulations will put the “meat on the bones” of the law.
The Cayman Islands government has now issued a commencement order for the Virtual Asset Law, 2020 which will come into effect on 31 October, 2020. Pursuant to the Commencement Order, there will be a phased approach to the implementation of the VASP Law as described in the following advisory.
This is relevant to the Israeli market, as it establishes for the first time a specific regulatory regime for issuers of digital assets who want to use a Cayman company to issue. According to definitions outlined in the VASP Law, it will likely capture all cryptocurrencies, security tokens, utility tokens, or other digital assets that are tradeable or transferable.
There is also a licensing and registration regime being introduced for custodians of digital assets, as well as those looking to set up an exchange.
Walkers has played a part in shaping the law (as did other industry participants and advisors) and is playing a part in shaping the regulations. Walkers also co-presented a webinar on the VASP law a month ago with the Cayman Government and the Cayman regulator as an invitee of the Blockchain Association of the Cayman Islands. You can watch here and read our blog here.
