Fintech 2026

CAYMAN ISLANDS Law and Practice Contributed by: Jason Ta, Gemma Walters, Paul Walters and Ben Magahy, Travers Thorp Alberga

2. Fintech Business Models and Regulation in General 2.1 Predominant Business Models There are a number of verticals for new and legacy players, which include the following. • Virtual asset trading platforms – the Cayman Islands hosts a number of regulated virtual asset trading platforms that facilitate the trading of a wide variety of virtual assets. These trading plat - forms play a crucial role in the global crypto market and attract investors seeking liquidity and expo - sure to virtual assets. • Custodial services – certain custodians in the Cay - man Islands provide secure storage and manage - ment of virtual assets on behalf of clients. They ensure the safekeeping of private keys and assist institutional investors, investment funds, and high net worth individuals. Custodial services are essential for maintaining the integrity and security of digital assets. • Token offerings – the Cayman Islands has been a popular jurisdiction for launching token offer - ings. Companies raise proceeds by issuing tokens (often utility or governance tokens) to purchasers in exchange for cryptocurrencies or fiat currency. • Blockchain and Web3 innovators – the Cayman Islands is home to innovators working on central - ised and decentralised technologies. These include blockchain projects, decentralised applications (DApps), and Web3 solutions. These innovators drive technological advancements and contribute to the global fintech ecosystem. • Alternative investment funds – the Cayman Islands is the leading domicile for alternative investment funds, including venture capital, private equity, hedge and crypto funds. These funds often invest in virtual assets, tokens, and related ventures. The jurisdiction’s regulatory clarity and tax neutral - ity attract investment funds, fund managers and investors. • Regulatory compliance services – given the evolv - ing regulatory landscape, compliance services have become crucial. Fintech companies rely on legal and compliance experts to navigate AML/ CFT regulations, data privacy laws, and licensing requirements.

• Decentralised finance (DeFi) – while still emerging, DeFi protocols and platforms are gaining traction in the Cayman Islands. These include lending, borrowing, yield farming, and liquidity provision. DeFi projects leverage smart contracts and block - chain technology to create decentralised financial services. • Payment solutions and remittances – fintech players in the Cayman Islands explore payment solutions and remittance services. These aim to improve cross-border transactions, reduce fees, and enhance financial inclusion. Legacy players also adapt to digital payment trends. • Digital identity and KYC solutions – with increased focus on security and compliance, fintech compa - nies work on digital identity solutions and KYC pro - cesses. These technologies streamline onboarding, enhance security, and prevent fraud. • Regulatory technology (regtech) – regtech firms in the Cayman Islands develop tools and platforms to assist financial institutions in meeting regulatory requirements. These solutions automate compli - ance processes, monitor transactions, and ensure adherence to reporting standards. 2.2 Regulatory Regime The financial services sector in the Cayman Islands is regulated primarily by CIMA. Key regulatory laws provide for a registration or licensing process whereby entities and individuals conducting regulated activity are required to obtain a registration or a licence from CIMA. The key regulatory laws of the Cayman Islands (as amended, in each case) that could apply to an indus - try participant include: • Anti-Money Laundering Regulations; • Banks and Trust Companies Act; • Beneficial Ownership Transparency Act; • Beneficial Ownership Transparency Regulations; • Companies Management Act; • Data Protection Act; • FATCA and CRS Regulations • Tax Information Authority (International Tax Compli - ance) (Crypto-Asset Reporting Framework) Regula - tions; • Insurance Act;

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