Laws coming to support virtual assets
(CNS): The resilience of the offshore sector will be critical to the Cayman Islands in the post COVID-19 economic recovery and new legislation is expected to help boost the industry in the coming months. Five new bills were gazetted last week that will provide a legal framework to promote the use of new technology and innovative enterprise in the jurisdiction, while complying with newly adopted international standards set by the Financial Action Task Force (FATF), officials said.
The Virtual Asset (Service Providers) Bill, 2020; the Monetary Authority (Amendment) (No.2) Bill, 2020; the Securities Investment Business (Amendment) Bill, 2020; the Mutual Funds (Amendment) (No. 2) Bill, 2020; and the Stock Exchange Company (Amendment) Bill, 2020 will be presented by Financial Services Minister Tara Rivers at the next meeting of the Legislative Assembly.
This proposed legislation will pave the way for an expansion in fintech and virtual asset service providers, such as those dealing in cryptocurrency like Bitcoin.
“‘The Cayman Islands would be one of the few countries in the world to adopt such a cutting-edge framework that is in alignment with global regulatory standards, which is in keeping with the innovative nature of this Government and our financial services industry,” Rivers said.
“At a time where innovation is needed to support the economy, given the effects of the COVID-19 pandemic on the more traditional economic pillars, this type of regulated fintech activity will help our financial services industry attract new clients and, in turn, contribute further to government revenue.”
Officials said that the local financial services industry stakeholders were consulted throughout the development of the legislation.
“The ministry has practiced a robust strategy of local engagement with industry and regulatory stakeholders, having carried out extensive consultations as a part of the legislative development process,” Rivers said in a release about the new bills. “The legislative enhancements being put forward are designed to increase the jurisdiction’s attractiveness as a domicile for virtual assets business while ensuring Cayman meets international obligations.”
As well as the virtual assets-related bills, four other pieces of legislation will be gazetted to enhance Cayman’s AML/CFT/CPF regime as the Caribbean Financial Action Task Force (CFATF) continues its review of the jurisdiction’s legislative and regulatory framework. The ministry anticipates Cayman’s technical re-rating by the CFATF, the regional governing body for the FATF, to be announced in October, with the FATF’s review and final rating to be completed shortly afterwards.
The Companies (Amendment) (No.2) Bill, 2020 and Limited Liability Companies (Amendment) (No.2) Bill, 2020 , the Trusts (Amendment) Bill 2020 and Banks and Trust Companies (Amendment) Bill, 2020 will all support improvements to the compliance regime.
Alongside the laws to help boost the sector, officials from the financial services ministry said a number of measures had been introduced to increase efficiency in the midst of the COVID-19 pandemic.
“Given the current environment, it is more important than ever that the ministry and its departments operate as efficiently as possible,” said Rivers.
The Registrar of Companies (RoC) and the Intellectual Property Office (CIIPO) have increased the number of staff working remotely. While the Cayman Islands Monetary Authority is also using remote working opportunities to maintain its functions.
“Increasing the number of staff able to remotely assist with registrations and filings is critical to facilitating business continuity during these challenging times as the world grapples with this pandemic,” Rivers added.
Commending the efforts of the ministry and related departmental staff, Rivers said, “Many people put in long hours and work tirelessly to ensure that business can continue as seamlessly as possible in order to maintain Cayman’s position as a leading global financial centre.”
Details on the RoC’s current operations can be found on the RoC website, along with information on Non-Profit Organisations (NPOs). General queries can be sent to cigenreg@gov.ky, while NPO questions should be directed to grcompliance@gov.ky.
CIIPO questions can be emailed to Candace.westby@gov.ky and there is more information on the CIIPO website. If a query is urgent and you have exhausted the available channels without a response within a reasonable time frame, you can proceed to contact the RoC on 926-8506 during normal office hours (Mondays to Fridays, 9am to 5pm).
The RoC notes that while processing times and response rates are not the same as before COVID-19, both have improved in recent days.
To learn more about the ministry’s work visit the ministry website.
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Category: Business, Financial Services, Laws, Politics
Yeah, just like Pension Law and Unclaimed (7 years) property law (the Dormant Accounts Law of 2010 that allows for funds in dormant (JUST 7 YEARS) accounts to be transferred to the general revenue of the islands.)
I pressed the wrong smiley! CNS, can you restart me plz? lol
Virtual currencies are not all the same. China’s soon-to-be-live state-run crypto DCEP/CBDC won’t use blockchain decentralized ledgers, no node operators, and no miner incentives. The AML risk couldn’t be higher if we are hosting sandbox-licensed virtual laundry exchanges in the Cayman Islands that can’t comply with AML even if they wanted to. We’ve created a scenario where the fastest, and least regulated hustlers, simply write our Financial Services headlines for us while our Financial Minister sleep-walks through another step of the learning curve.
Could you please rewrite that in English?
Basically: the Cayman Islands continues to be cited for failing to do more on the tackling of entrenched corruption, embargo violations, money laundering, proceeds of crime, human/narcotic trafficking, and terror financing. Almost by example, our Financial Minister has allowed our territory to host 35 virtual coins, 14 virtual currency exchanges, and 2 wallets, that expedite the obscuration of money sources and ownership at a key stroke. She initially took a “wait and see” attitude towards regulation, then the $30mln ICO fraud headlines hit last year. Now, CIG must be seen to be “doing something” on regulation, and so, the businesses are to be self-reporting, and overseen (presumably) by an ill-equipped Cayman Islands Monetary Authority (themselves written up for inaction in a half dozen Suspicious Activity Reports per last year’s Caribbean Financial Action Task Force review). These businesses are to do their best to conduct “anti-money laundering” on accounts setup by untraceable telephone SIM cards, for private virtual currencies that don’t leave any trail of ownership. Let’s see how these best efforts go! It’s doubly insulting to all of the career professionals who spend millions of dollars, and thousands of office hours a year in compliance of each successive initiative – latching, chaining, bolting, and bracing the front door, while the service entrance is deliberately left swinging in the breeze.