Cayman Islands Regulatory Round Up - Spring 2025

In this edition we cover:

• RECENT FILINGS DEADLINES

• KEY LEGISLATIVE DEVELOPMENTS

• Cayman Islands Monetary Authority (CIMA) publications;

• FINANCIAL SANCTIONS

• 2025 HORIZON SCANNING

• PUBLISHED BRIEFINGS AND E-ALERTS

• HOW WE CAN HELP

Links to the underlying CIMA and DITC publications, as well as related Appleby published briefings and e-alerts are available throughout this document. The information provided is “as of” 30 May 2025.

CIMA publications

A series of notices and circulars were issued by CIMA between March 2025 and May 2025:

March 2025 – CIMA issued a notice (available here) urging the public to be vigilant against financial scams and fraudulent individuals falsely claiming to act on behalf of CIMA.

April 2025 – CIMA issued a notice (available here) clarifying that gate.io and Gate Global Corp are not, and have never been, registered, licensed, regulated or otherwise authorised by the Authority to conduct virtual asset service provider business in or from within the Cayman Islands.

April 2025 – CIMA issued a supervisory information circular (available here) regarding the licensing of new virtual asset service providers and those that are currently registered with CIMA to undertake virtual asset custody and virtual asset trading platform services in or from within the Cayman Islands and other amendments to the Virtual Asset (Service Providers) Act, that came into effect on 1 April 2025.

April 2025 – CIMA issued a revised list of Approved Stock Exchanges for the purposes of the Regulatory Acts, effective 22 April, 2025 (available here).  Appleby was instrumental in obtaining approval for the Toronto TSX Venture Exchange to be added to this list.

May 2025 – CIMA issued a supervisory information circular (available here) setting out CIMA’s findings from inspections conducted for registered persons under the Securities Investment Business Act conducted during the period 1 January 2022 to 31 March 2024.

2025 Horizon SCANNING

In this section, we preview possible upcoming regulatory changes that we may see over the next few months for clients operating a regulated business.

1. Strengthening Oversight of Virtual Asset Service Providers (VASPs)

The Cayman Islands continues to develop its regulatory framework for VASPs.  As of 1 April 2025, key provisions of the Virtual Asset (Service Providers) Act, 2020 (as amended), were brought into force.  These key areas included:

• • Licensing for custody and trading platform operations;
  • Increased supervisory oversight and registration requirements;
  • Ongoing compliance expectations as clarified in CIMA’s latest circulars and guidance.

A revised version of CIMA’s Regulatory Policy on Licensing and Registration of Virtual Asset Service Providers was gazetted in May 2025 (available here) (the “revised RP”).  The revised RP replaces the 2024 version and, amongst other things, provides for circumstances in which CIMA may waive the requirement for a licence or registration for a “supervised person”, meaning a person licensed or registered under another of the regulatory laws.

We expect continued regulatory focus and possible further legislative refinements to the virtual assets regime.

2. CIMA Supervision and Enforcement

CIMA is expected to maintain its emphasis on risk-based supervision and inspection programs, particularly in relation to:

• Investment services (as evidenced by CIMA’s inspection findings issued in May 2025);
• Fund operators, whereby there is an ongoing expectation for timely filings of FAR forms and audited financials;
• Registered persons under the Securities Investment Business Act, including AML/CFT controls and governance frameworks.
• Deposit taking institutions being institutions authorised to accept deposits from the public including banks, cooperative societies, (including credit unions, building societies and similar financial institutions) and the Development Bank of the Cayman Islands.  A Regulatory Policy on Domestic Systemically Important Deposit Taking Institutions was gazetted in May 2025 (available here) which supplements the Rule (available here) which became effective in May 2024.

3. Increased scrutiny of CRS and FATCA Reporting

International tax transparency remains a core priority of the DITC, with updates impacting:

• The expanded list of reportable and participating jurisdictions (with new inclusions for 2025 and 2026 reporting cycles);
• Greater emphasis on timely CRS & FATCA filings, including nil returns where applicable; and
• Ongoing submission of the CRS Compliance Form, due by 30 September 2025.

The DITC is also proposing to enhance its data quality review and audit processes, making documentation readiness and internal record-keeping more important than ever.

How we can help

Keeping up to date with new and proposed legislation and regulation is an ongoing challenge for businesses. Our regulatory team monitors and analyses proposed and upcoming legislative and regulatory developments, to determine the practical implications for our clients.

Our regulatory team has seen increased demand from clients for advice on and assistance in complying with CIMA requirements and DITC requirements. We continue to:

• monitor Cayman Islands legal and regulatory developments;
• produce client focused briefings and e-alerts tracking new developments;
• contribute to various industry consultations covering legal and regulatory developments affecting our client’s businesses; and
• provide training to clients to support their existing compliance framework.

Please do not hesitate to contact us if you require guidance on any of the above developments or assistance with your regulatory obligations.

This information is provided for general information purposes only and does not cover every aspect of the subject matter discussed, and is not intended to constitute legal advice.  For specific regulatory advice, please contact any member of our Appleby regulatory team.