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Cayman Islands are working on a regulatory framework for VASPs

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Cayman Islands are working on a regulatory framework for VASPs
It seems that the well-known tax haven wants to improve its image in the eyes of financial regulators around the world.

The Ministry of Financial Bitcoin Code Services of the Cayman Islands Government announced that it has begun work on a regulatory framework for service providers related to virtual assets, or VASP.

In a press release on 31 October, the ministry stated that the move is intended to strengthen „the country’s ability to regulate and attract people and companies involved in doing business with virtual assets“.

The first phase of the implementation, which is already underway, focuses on compliance and enforcement of anti-money laundering (AML) and counter-terrorist financing (CFT) rules.

The new framework incorporates the updated recommendations adopted by the Financial Action Task Force in 2019.

As reported by Cointelegraph at the time, these guidelines included the controversial „travel rule“, which requires VASPs to collect and share personal data from both those who carry out a transaction and those who receive it.

Existing and new VASPs must register with the Cayman Islands Monetary Authority in order to demonstrate their compliance with AML/CFT global standards.

The Cayman Islands regulatory framework is currently under review by both the FATF and the Caribbean Financial Action Task Force, following a recent „Mutual Evaluation Report“.

The VASP framework will be subject to review prior to the reassessment of the CFATF, scheduled for November. The results of the FATF review are expected by the end of the first quarter of 2021.

The second phase of implementation will include the „authorisation and prudential supervision requirements“: it is expected to enter into force in June 2021.

The Cayman Islands were removed from the EU’s blacklist of tax havens last month and appear to be making serious efforts to improve their image in financial circles.