CAYMAN ISLANDS Law and Practice Contributed by: Peter Colegate, Marsha Williamson and Dean Bennett, Appleby
Appleby 60 Nexus Way George Town Grand Cayman Cayman Islands KY1-1104 Tel: +1 345 949 4900 Email: caymantechteam@applebyglobal.com Web: www.applebyglobal.com
1. Overview of Blockchain and Crypto- Assets 1.1 Blockchain 1.1.1 Evolution of Uses of Blockchain The Cayman Islands as a Blockchain Hub The Cayman Islands has earned its position as the off- shore jurisdiction of choice for blockchain and digital asset businesses through a combination of deliberate regulatory design and organic market development. The jurisdiction offers a regulatory framework that is both credible and proportionate. The Cayman Islands Monetary Authority (CIMA) has avoided the tempta- tion to over-regulate novel technology prematurely, while ensuring that the infrastructure for compliance is robust enough to satisfy institutional counterparties, correspondent banks and international investors. Over the past twelve months the market has contin- ued its shift from speculative and retail-facing activity toward institutional use cases. The dominant themes are tokenisation of real-world assets, tokenised fund structures, stablecoin issuance and DeFi governance entities. The special economic zones operated by Cayman Enterprise City remain a significant draw for web3 businesses, offering a package of tax neutral- ity, rapid work permit processing and a concentrated professional community that few comparable jurisdic- tions can match. Key Legislative Developments Two legislative developments stand out as particu- larly significant for practice over the past year. First, the Virtual Asset (Service Providers) (Amendment) Act, 2025 (the “VASP Amendment Act”) materially
narrowed the VASP Act’s “issuance of virtual assets” definition, confining it to the public sale of newly cre- ated virtual assets in exchange for fiat currency, other virtual assets, or other consideration. Second, and related, a comprehensive tokenised funds framework came into force on 24 March 2026, co-ordinating amendments across the Mutual Funds Act, Private Funds Act, and the Virtual Asset (Ser- vice Providers) Act (VASP Act). Cayman now has a bespoke regulatory regime for tokenised investment funds that gives CIMA supervisory oversight of the underlying technology and digital tokens, imposes specific record-keeping obligations, and requires an annual confirmation of compliance. Near-Term Outlook The recalibration of US digital asset regulation under the current US administration may reduce demand for certain offshore structures. At the same time, it increases demand for stable, predictable regulatory environments – an area where the Cayman Islands competes effectively. Interoperability between block- chain networks, the convergence of AI with on-chain infrastructure and the growth of institutional on-chain liquidity are expected to drive further structuring activ- There is no IP regime in the Cayman Islands tailored to blockchain technology. Ownership of smart con- tract code and protocol IP follows standard English common law copyright principles, and practitioners structuring token issuance or protocol deployment transactions should ensure IP ownership, licensing ity through the jurisdiction. Intellectual Property (IP)
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