Various panellists at Cayman Crypto Week 2026, held from 9 Feb. to 13 Feb., cited the jurisdiction’s regulatory framework as one of its main attractions for cryptocurrency firms.
Cayman passed the first iteration of the Virtual Asset (Service Providers) Act in 2020, which was subsequently amended in 2025, with further amendments tabled for 2026. Blockchain.com, which was one of the largest and oldest crypto firms to speak at the event, cited the VASP Act as a key incentive in coming to Cayman.
“We were founded in the UK and registered with the FCA, but after VASP was passed it made Cayman look more attractive,” said Lane Kasselman, the co-CEO and president of Blockchain.com.
Blockchain.com, which offers individuals and companies crypto trading and custody services, is registered in more than 70 jurisdictions around the world.
“Back in 2022, crypto companies were guilty of regulatory arbitrage,” said Kasselman during the 11 Feb. panel. “We were getting licences [in different jurisdictions] because we didn’t know what the regulatory landscape was going to look like. Today you can’t play that game because requirements are getting tougher so you would get crushed under the regulatory responsibility of fulfilling all of those licences.”
Indeed, VASPs in Cayman have seen the requirements increase. Phase 1 of the VASP law required all digital asset firms to register with the Cayman Islands Monetary Authority. Then phase 2 required any firm offering trading or custodian services for digital assets to apply for a licence from the monetary authority. The first of those licences was granted on 5 Feb.
In addition to the roll-out of VASP legislation, there has been plenty of work amending existing laws so that Cayman’s finance centre is ready for digital finance. For example, in early February, the government published the Mutual Funds (Amendment) Bill, 2026 and the Private Funds (Amendment) Bill, 2026, to clarify that investment funds using blockchain technology to tokenise investment interest don’t have to apply for a VASP licence.
Cayman’s regulatory balancing act
Attendees at the event acknowledged that Cayman’s digital asset regulation is a balancing act. On one hand it must create a workable regulatory framework that attracts the digital asset finance firms that are becoming an increasingly important part of global finance. Yet on the other hand, the flow of digital assets in and out of Cayman needs to be regulated with sufficient rigour to prevent Cayman falling foul of the Financial Action Task Force.
“VASP regulation is extremely important because under recommendation 15 of FATF, countries are now required to have legislation in place to oversee the virtual asset space,” said Haymond Rankin, associate director for the fintech, virtual assets and banking sectors at Cayman Finance.
“If we didn’t have anything in place, we wouldn’t be compliant with that recommendation so it’s vital from the international standpoint to address these things and get them right,” said Rankin, speaking on the sidelines of the event on 12 Feb.
With Web3-based finance evolving rapidly, further changes in regulation are likely.
“Over the past two or three years, global crypto businesses were guessing what the market wanted,” said Kasselman during the event, which was held at Hotel Indigo Grand Cayman. “But now the dust is beginning to settle, so different players are clear about their business model and the markets they want to develop. In time the regulator will probably react to that with more changes to requirements.”
Other panellists agreed, noting that one of Cayman’s advantages as a relatively small jurisdiction is that companies can interact with the regulator. “CIMA is willing to engage and have a conversation with companies,” said Lucy Frew, a partner at Walkers. “That gives firms the chance to explain their business model and discuss mitigation of potential risks.”
Lennon Sweeting, the managing director of RYKI, cryptocurrency broker and custodian that was recently awarded a conditional VASP licence, agreed. “It’s not easy for regulators because you get very different sizes and types of businesses applying for a VASP licence. But CIMA doesn’t try to impose a ‘one size fits all regulation’ and takes a bespoke approach.”
