Business & Investment

Crypto Licensing in the Caymans

The Caymans are an interesting option for businessmen who want to engage in crypto activities and have decided to get an ICO license. Such activities are permitted by law and regulated at the state level. Demands in Caymans for creating a crypto exchange are somewhat different from other jurisdictions. If you are interested in crypto licensing in the Caymans, you may contact specialist that can provide you more related information.

Recently, the Cayman Islands, one of the most famous offshores on Earth, announced a new regime for regulating the digital assets business. This year, individuals wishing to get a license must comply with the updated rules or the so-called VASP. Now there are many organizations on islands that work with blockchain and cryptocurrencies, and their number is only growing. This report will be especially useful to those who also want to pass licensing and register a virtual asset company, and executives interested in investing in securities within this jurisdiction.

The new legal requirements bring some new aspects to the regulation of crypto asset structure and related services. Purpose of this amendment is to combat money-laundering trends. Recently, authorities announced a new requirement for a public registry of companies with the disclosure of beneficiaries.

Legal Regulation of Cryptocoins Activities

When using cryptocurrencies as payment mechanisms, MSL may be used, and activities with cryptocurrencies and tokens may be regarded as activities for provision of monetary services. In this case, the company must get appropriate license from CIMA to conduct such activity.

Money service operations include following:

  • money transfer services provision;
  • cashing checks;
  • issue, sale or redemption of money orders or traveler’s checks;
  • other Services as may be determined by the Governor of the Cayman Islands;
  • carrying out all or one of the above activities as an agent or franchisee.

In addition to the license, cryptocurrency companies are required to combat with financing of terrorism legislation. In case of violation or non-compliance of the token sale with the current legislation, CIMA may oblige the issuer to obtain a license granting the right to conduct activities related to investing in securities.

It follows from this that the first step is to pay attention to cryptoregulation in state where you want launching a foreign crypto project or get an offshore crypto license. Based on the regulation, it will be possible to understand: how to register a crypto fund in Caymans and whether opening an account for cryptoactivities will be successful or not.

Firm Registering And Maintenance

In order to obtain the status of an exempted organization, you should meet following conditions.

  • The company’s activities will be wholly or in large part outside the Cayman Islands.
  • Shares of such a company should not be in free circulation and should be transferred exclusively in company accounting documentations.
  • Firm must not trade or enter into deals with entities or individuals resident in Caymans.
  • If a company’s securities are not listed on the CSX, then the company is prohibited from offering its securities to the public.

On the territory of the Cayman Islands there are no rules regarding the so-called thin capitalization (a situation where there are too few shares and too many debt securities in the company’s authorized capital), as well as there are no demands to issue more than 1 share. In this regard, the authorized capital of an exempted company may consist of only one share, which can be divided into different classes. Moreover, Part III of the CL allows the issuance of a share of a share as well.

What Do You Need to Open Credit Account: ICO on Offshore

Laws regarding user verification may also vary from jurisdiction to jurisdiction. This is why some financial institutions open an account instantly for an offshore crypto company, while others consider applications after a while in order to conduct a full client verification.

To open an account with an offshore crypto company, the following information may be required.

  • Driver’s license, passport or other government issued ID.
  • Copy of utility bill.

In some cases, they may even ask about the nature of your business and a description of your cryptocurrency-related activities.

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