Cryptocurrency property sale overseen by CIMA

| 14/09/2022 | 92 Comments

(CNS): A real estate agent raised eyebrows across the community after conducting the first-ever sale of property where a buyer used cryptocurrency. The details of the sale and buyer haven’t been released, but the Cayman Islands Monetary Authority (CIMA) has said that the multi-million dollar deal conducted using virtual assess was above board because the specialist escrow provider that processed the sale is registered with the authority. But the sale of luxury property to overseas investors and cryptocurrencies remain two of the top concerns for money laundering risk, according to the government.

Michael Joseph, the agent who sold the property using Parallel Limited, a virtual asset service provider (VASP), said this was a game changer and a “big evolution” for Cayman but “undoubtedly raises questions”.

He said that while this is the first transaction conducted using virtual currency it won’t be the last, but the potential money laundering or other risks relating to the beneficial owners or origins of the money are mitigated because of the due diligence conducted by the escrow firm.

“The standard requirement remains for the agent to complete their KYC [know your customer] process as usual,” Joseph told CNS in answer to our questions about the potential risks. “No oligarchs or drug dealers would survive the process.”

Laura Birrell from Parallel, which is the only firm of its kind in Cayman registered with the regulator, agreed with Joseph. “Nefarious players would be unlikely to survive the diligence process that not only Parallel carries out, but the real estate agents and lawyers carry out too,” she said.

Until now, without this type of go-between, described as gate-keepers by government officials, investors have not been able to buy property using cryptocurrency as it was impossible to satisfy the source of funds and compliance requirements, Joseph said.

Although property sales are regulated by the Department of Commerce and Investment, cryptocurrencies are regulated by the Cayman Islands Monetary Authority, so this sale fell under CIMA supervision. CIMA said that it has consulted with other government agencies, and will continue to do so where legally permissible and necessary, to provide proper oversight of these types of regulated and registered entities.

“In accordance with the Anti-Money Laundering Regulations, Parallel is subject to AML/CFT supervision by CIMA and is, therefore, obligated to comply with such regulatory requirements, including the Travel Rule, which requires all VASPs to obtain, hold and share specific information on virtual asset transfers,” CIMA officials told CNS. “As with all regulated entities, CIMA will continue to monitor Parallel’s business activities to ensure compliance with the VASP Act and AML legislation.”

The DCI said registered entities, such as the broker in this transaction, are supervised to ensure they are AML/CFT compliant, as required by the AML regulations. “As part of this supervision, transactions such as the recent sale of property by way of cryptocurrency are reviewed for compliance with AML legislation and forms part of the ongoing monitoring carried out by DCI’s compliance team for its regulated entities,” a spokesperson stated.

Nevertheless, virtual assets and cryptocurrency transactions as well as the sale of property to overseas buyers remain key areas of vulnerability for the Cayman Islands, according to its own experts. Both the DCI’s 2021 Supervisory Report and the National Risk Assessment 2021, which were recently made public, noted the risk posed by the real estate sector.

The NRA found that virtual assets present a high risk, and despite a global transaction volume of some US$3 trillion in cryptocurrency and its integration into the mainstream economy, criminals can transfer, integrate and layer illicit funds into virtual assets, and then back to fiat currency, to obfuscate the original source and purpose of the asset.


Share your vote!


How do you feel after reading this?
  • Fascinated
  • Happy
  • Sad
  • Angry
  • Bored
  • Afraid
Print Friendly, PDF & Email

Tags: , , ,

Category: Business, Real Estate

Comments (92)

Trackback URL | Comments RSS Feed

  1. Anonymous says:

    Meanwhile Cartels are moving billions every years through these traditional ‘safe’ banks. the hypocrisy is real.

    13
    4
    • Anonymous says:

      Sounds like you know something the rest don’t.

      7
      5
      • StopTheCrime says:

        Big banks have paid more in fines for laundering money than the entire market cap of Bitcoin itself. When it comes to the money which criminals use most, it’s the US dollar, and it’s not even close.

    • Miami Dave says:

      Russian oligarch money at play here in Cayman real estate.

      Better wake up soon Cayman, or you will feel the wrath of the American Treasury very soon.

      5
      2
  2. Anonymous says:

    HSBC Cayman (before being ordered closed), had been a regulated entity/gatekeeeper, yet that didn’t stop them from setting up hundreds of accounts for nominee companies operated for the Sinaloa Drug Cartel. CIMA encourages gatekeepers to adopt a “risk based” approach where making money at one end of cultural continuum, and going supernova at the other. Offshore Alert would have nothing to print every month if the greed-based “try your best” regulatory system functioned.

    12
    1
  3. Anonymous says:

    Sure, oligarchs and/or drug dealers and other sanction list characters don’t survive KYC/AML scrutiny in their own name, but that’s why they use loyal smurf nominees who easily can. The use the best firms and lawyers. Deception is their full-time job and business is booming in Crypto/Union-Pay real estate worldwide. Regulators can’t track it, and realtors and closing agents don’t care so long as they get a pay day. Queue the next Cayman Islands headline event…

    7
    8
  4. Anonymous says:

    CIMA needs to clarify how the Travel Rule was complied with for this sale.

    Why is VASP licensing no longer handled by the Securities Division? Why is it now all of a sudden someone else is handling VASP?

    Hon Minister Andre Ebanks do you know what is happening ?

    13
    1
    • Anonymous says:

      Good question.

    • StopTheCrime says:

      All cryptocurrencies live on the blockchain. Only the private keys which provides access to that currency travels. You can travel through any airport in the world carrying a metal key to a safe. Same thing.

    • Anonymous says:

      Why does CIMA hire former employees as consultants? VASP licences are being handled by a former employee working remotely.

  5. watcher says:

    I fail to see where Crypocurrency can even pass AML standards; the very core of AML requires the RE broker to KNOW — not guess, not be told by the buyer, but KNOW — the source of the funds.

    This is sketchy and doesn’t bode well for the Cayman Islands.

    19
    6
    • Anonymous says:

      You can trace bitcoin all the way back through the blockchain to see where it has been and what it has been used for. It is no different to US dollars.

      7
      4
      • Anonymous says:

        Sure the origin and history of the coin, not the source of funds once laundered through a crypto-exchange. Flip amongst 18 different crypto currencies, that trail goes cold in a millisecond keystroke. This is why crypto is the medium of exchange for those that can’t pass normal AML tests on the provenance of their cash assets.

        9
        2
      • Anonymous says:

        only on the bitcoin blockchain. you can wash it through other coins easily.

      • Anonymous says:

        You can’t track USD

        4
        2
    • StopTheCrime says:

      Same thing for cash then, right? How do you know where a dollar has been?

      2
      1
  6. Anonymous says:

    Crypto has grown into the world’s largest and most dangerous scam. What began as a currency to buy and sell illegal drugs on the Silk Road to avoid regulators is now being normalized as “safe”.

    41
    12
    • Anonymous says:

      Bitcoin, which was created by a pseudonymous named person (Satoshi Nakamoto), was really created to allow clandestine operatives (such as, CIA and MI-6) to operate in the shadows.

      Clandestine operatives have the same need to operate secretively and criminals have made use of this as an anonymous payment function and so too have legitimate investors.

      Classic hypocrisy which has perpetually repeated itself over and over. Funny world we live in.

      12
      7
      • Anonymous says:

        Common sense is strong the people need you.

        1
        3
      • Anonymous says:

        Bitcoin is fool’s gold. Imagine the sole reason for your value is trillions of Megawatt hours of electricity consumed at a time when “sustainability” is being touted?
        Crypto should have utility otherwise it is useless.
        Bitcoin is useless, soon to be followed by the buggy, innefficient and “expensive as hell” Ethereum that our very own prophet in Little Cayman is promoting.
        People, a little research won’t hurt.

        3
        4
        • Anonymous says:

          hail to the prophet, & to Little Cayman, where we can sit back and watch the chaos play out…buckle up and wait for the boom to go bust…it’s coming.

    • StopTheCrime says:

      There will only ever be 21 million Bitcoins. It is mathematically limited forever. Meanshile, Dollars are unlimited. Tell me which one is more dangerous again?

  7. Anonymous says:

    This isn’t “key areas of vulnerability for the Cayman Islands”. Did someone (govt) get their share? Yes! And the problem is??? I’d say the destruction to beaches and the now “plastic sand” outshines this

    13
    4
  8. Caymankind says:

    Can someone tell us how El Salvador is doing since introducing bitcoin as a currency?

    28
    1
    • StopTheCrime says:

      Tourism is WAY UP in El Salvador since adopting Bitcoin. They have also built a hospital and 4 schools because of Bitcoin.

      3
      3
  9. Anonymous says:

    Actually CNS it was two real estate companies who were involved. The listing side are just the ones bragging about it thought they did not bring the purchaser nor have anything to do with the transaction.

    34
    2
    • Anonymous says:

      The story actually mentions both sides: it just doesn’t mention the name of Michael Joseph’s company. I am not sure why not.

      15
      3
      • Anon says:

        14/09/2022 at 9:52 pm Actually it doesn’t – it mentions MJ and the VASP but not the other agency.

        5
        1
        • Anonymous says:

          Exactly idiot. It does not mention the other real estate brokerage that actually brought the buyer and dealt with the transaction. Property Cayman had nothing to do with it beyond having the listing. Which he also [was wrong] about it being sold within 6 days. It was on the market for ages, however, it sold after 6 days of the final reduction made on the property.

      • Anonymous says:

        No it doesn’t. Joseph’s company is Property Cayman. The company who actually brought the buyer was RE/MAX

    • Anonymous says:

      Fact

      10
  10. Anonymous says:

    Kudos to Parallel for making this work. As was pointed out on SEVERAL occasions, Parallel are regulated by CIMA and are subject to strict AML/KYC checks – the same as any law firm or bank. These fears are outdated; the narrative that every person who owns crypto is a criminal is simply not true.

    32
    26
    • Beaumont Zodecloun says:

      Crypto is not trackable. ALL transactions within the Cayman Islands are required to have a vetted source of funds. I am amazed — or I guess I shouldn’t be — that this transaction was allowed to be completed. AML standards should have not allowed it to happen. We are doomed if we allow this to continue.

      12
      13
  11. Caymanian says:

    Cayman real estate market at an all time high, while crypto currencies are taking a beating. Why on earth would anyone trade a hard asset that has historically increased in value, for crypto currency’s volatility? No thanks.

    29
    12
    • _||) says:

      “Why on earth would anyone trade a hard asset that has historically increased in value”

      because I bought my bitcoins at $65 USD a piece, and today they’re hovering around 20k. Granted, it hit 60k at some point, but I am still QUITE in the green.

      Crypto’s graphs have had crashes, as with every stock, but it has always eventually recovered and surpassed the crash.

      12
      21
      • Anonymous says:

        biggest Ponzi scheme ever, does not produce any goods or services unless you count being a fake currency and you can’t hold it physically. Kind of like a NFT except there were no more greater fools to come along.

        7
        6
        • StopTheCrime says:

          I have news for you: you can’t hold most dollars in your hands either. Almost all of them are already electronic and you’re trusting a bank to keep the value of them from being debased. I’d rather trust math than a greedy banker or fallible human’s opinion.

          2
          1
    • Anonymous says:

      Crypto soon crash.

      18
      4
    • Anonymous says:

      “Why on earth would anyone trade a hard asset that has historically increased in value, for crypto currency’s volatility?”

      The sentence before this literally answers your own question! BUY LOW SELL HIGH!!

      10
      3
    • Anonymous says:

      The Cayman currency is going down in value. The property isn’t going up.

      1
      1
    • StopTheCrime says:

      While Bitcoin’s volatility may be unpredictable, it always reaches new highs with every 4-year halving cycle, exactly as designed. One thing that it not volatile is Bitcoin’s monetary policy. Imagine having a dollar and knowing with certainty when and how many will ever be printed.

  12. Anonymous says:

    Crypto is the fluidity of the future financial marketplace. It will culminate in the ubiquitous, subcutaneous chip that will connect you and all of your records into the global database.
    XML flew under the radar, but now it underpins all structured data transfer.
    Well X does indeed mark the spot. I am talking about Ripples’ XRP and XLM.
    These cryptos will be the foundation of the future real-time financial marketplace.
    I remember doing a class in 2001 regarding XML. This was just after the Bill Gates book, “The Road Ahead” was released.
    There was going to be only one result.
    Get ready for your chip.

    9
    20
    • Anonymous says:

      Crypto bro!

      Crypto will fail, and when it does it will take down the global economy.

      10
      6
      • StopTheCrime says:

        it would need to be accepted by all to be big enough to “take down the global economy.” You’re arguing for it’s success and don’t even realize it.

    • Anonymous says:

      how will you explain it to a 3 year old? they all understand money

      • StopTheCrime says:

        3 year olds do NOT understand money. That’s why they cannot open bank and brokerage accounts on their own.

        Here’s how I explain it to beginners who are adults:

        Bitcoin is a hard-capped supply, decentralized, permissionless, electronic form of money that is censorship resistant and does not rely on any 3rd party. No person, company or nation controls it nor can they stop it.

        • Anonymous says:

          It’s unfathomable for the basic folk. They are the same ones that will buy in at the peak, lose their money and call it a scam. They will say the people that made money were lucky.

    • Anonymous says:

      lol. OK bro.

    • StopTheCrime says:

      Nope. Those coins are too centralized to be accepted by the public. Who would ever want that? Decentralization is everything. Bitcoin only.

  13. Anonymous says:

    You got to be as arrogant and stupid as the recently fined financial service firms not to fool CIMA.

    10
    1
  14. Anonymous says:

    Ah Crypto, solving all the problems no one legit has since 2009.

    14
    5
  15. Anonymous says:

    “No oligarchs or drug dealers would survive the process.”

    Since when do oligarchs not survive the process? They own almost everything last time I checked.

    37
    1
  16. Anonymous says:

    Funny to see CIMA tout this as a success when there are completely unregulated entities working in the crypto markets out of the Kirkconnell protected Enterprise City.

    54
    2
  17. Anonymous says:

    Interested in some snake oil that I have for sale?

    33
    7
  18. Anonymous says:

    Funny, it’s as if regular old FIAT currency (that’s the US and Cayman Dollars) has never facilitated any crimes at all!

    People always fear the new, and those who stand to lose the most from change are always the loudest..yes cayman banks, I’m talking about you

    34
    18
  19. Anonymous says:

    How about tax the billions of dollars of cryptocurrency that goes through cayman every day/week.
    Look at all the exchanges that operate out of Cayman. Binance is the largest exchange is in Cayman.

    Anti-Money Laundering Regulations are a joke, they have admitted they have never convicted anyone they just oversee transactions.

    Most people don’t know anything about crypto.

    22
    13
    • Anonymous says:

      How about you think through your suggestion for a second. Why do you think crypto “goes through” here? If there were taxes, do you think it still would?

      25
      1
    • D. Truth says:

      A lot of people DO know about crypto currency, and they avoid it!

      By the way….. Isn’t “crypto” a synonym for”FAkE”?

      16
      8
      • Anon says:

        i think i will just bury my head in the sand an invest in things that acctually exist,bricks &mortor ,gold etc.that way all you everso intelligent fantasy beliving modern folk can mock me an call me a dinasor.i also wont wake up one morning to find my assets have vaporised.

        10
        1
        • Anonymous says:

          Clueless. Your dollar is being vaporized when they print trillions of it. Wait to see what happens to the US dollar once China, Russian and the rest of the Bric countries start trading in their own currency. Here’s a clue. It will really vaporize then.

      • StopTheCrime says:

        Nope. It’s real. Certainly more “real” than the fake dollars they print by the TRILLIONS with the push of a button.

    • Anonymous says:

      Just remember………………It could also turn into Crapto.

      11
      1
    • Anonymous says:

      I understand crypto and have zero interest in owning any. IME the vast majority of Crypto bros have failed trying to accumulate wealth in regular currencies and cling to crypto to get rich quick, the same way half of them did ‘fx trading’ before that.

      2
      2
    • Anonymous says:

      Most people don’t know anything about crypto- including you it would appear. Want to explain how that coin “passes through” Cayman?

  20. Anonymous says:

    I’ll buy one laundromat please

    30
    2
  21. Anonymous says:

    You would be insane to trade bitcoin for property right now. Our property market is way over inflated and the crypto market like the stock market has taken a big hit thanks to the Biden administrations terrible policies.

    Whoever received the crypto, well done to you! You’ll be worth an absolute fortune in a few years!

    22
    28
    • Anonymous says:

      That’s a bit like saying you would be insane to trade cash for property right now, when you could trade it for deflated-cost stocks. Doesn’t matter if I want a house.

      24
      3
    • Anonymous says:

      Unless you hold a bunch of Bitcon and know it’s actually rubbish.

      No one asks why are Bitconers always buying hard assets if their cons are so undervalued.

      11
      3
    • D. Truth says:

      Or not !

    • Anon says:

      Plz tell us all the SPECIFIC policies that Biden has put into place that have affected Bitcoin and the stock market. 😂🤣😂🤣 You might wanna take an economics course or ten.

      6
      3
    • Anon says:

      whoever got the crypto worth a fortune in a few years?or worth f##k all in the blink of an eye more like.an we all know the most likly outcome.

      2
      2
  22. Anonymous says:

    How was the stamp duty paid, assume CIG won’t accept crypto and the traditional methods of payment of stamp duty applied?

    48
  23. Anonymous says:

    lots of Cayman real estate is being bought and sold this way. This only making news to market the agent and make CIMA look cutting edge zzzzzz

    21
    18

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.