The Cayman Islands Monetary Authority ("CIMA") has published finalised measures on the cancellation of licences, registrations, and waivers for Virtual Asset Service Providers ("VASPs"). The Rule and accompanying Regulatory Procedure were gazetted on 10 September 2025 following industry consultation earlier this year.
The framework provides clarity for VASPs that choose to cease operations, relocate, or voluntarily cancel their authorisation under the Virtual Asset (Service Providers) Act (Revised) ("VASPA"). It also captures entities that were licensed, registered, or granted a waiver but never commenced business. Involuntary cancellations arising from breaches or enforcement remain governed by CIMA's separate enforcement powers.
Key features of the new framework include:
- Notification requirements: VASPs must notify CIMA within fifteen days of deciding to cease operations, and those that have not commenced business within one year must inform the Authority before the period expires.
- Good standing: Entities seeking cancellation must be up to date with filings, fees, and remediation of supervisory findings, and directors must remain fit and proper persons.
- Compliance confirmations: AML, CFT, counter-proliferation financing, and sanctions compliance must be confirmed by a compliance officer through notarised documentation.
- Safeguarding clients: VASPs must ensure client assets are properly returned, transferred, or protected, and that stakeholders are notified of the cancellation in advance.
- Liquidation oversight: Where complex or illiquid assets are involved, voluntary liquidation must be overseen by a qualified liquidator.
The measures were refined in response to feedback, including clarification of the definition of stakeholders, enhanced provisions on solvency declarations, and flexibility on methods of stakeholder communication. The framework is intended to promote orderly exits, protect client interests, and maintain Cayman's reputation as a well-regulated jurisdiction.
The Rule, Regulatory Procedure, and consultation feedback statement are available on CIMA's website under the "Prior Consultation" section here:
- Rule: Cancellation of Licences or Registrations for Virtual Asset Service Providers
- Regulatory Procedure: Cancellation of Licences or Registrations for Virtual Asset Service Providers
- Consultation Statement
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
